Empowering Students Through Enhanced Financial Counseling Act

Floor Speech

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Ms. BONAMICI. Mr. Speaker, I rise today to support H.R. 3179, the Empowering Students Through Enhanced Financial Counseling Act. I appreciate the opportunity to work with Congressman Guthrie on this important legislation, and I commend Chairman Kline and Ranking Member Scott for their leadership, without which this bill would not be on the path to becoming law.

The Empowering Students Through Enhanced Financial Counseling Act will provide college students with clearer information about their rights and obligations as student loan borrowers. The current process of borrowing student loans and preparing for repayment can be confusing. In fact, I have heard from many borrowers who did not understand the terms of their loans or the tools and programs available to help them manage their debt. The lack of information on the benefits and consequences of taking on student debt is especially troubling during a time when more students are turning to loans to cover the costs of higher education--and they are borrowing larger amounts, on average.

This legislation will put in place several commonsense requirements to help student loan borrowers make informed decisions about borrowing and plan for the future. The bill will require annual loan counseling. Each year students can track how much they have borrowed, how much they are projected to borrow, how much interest has accrued and will continue to accrue, and what they are likely to be asked to pay each month upon entering repayment. In addition to regularly monitoring their debt, students will be reminded that they can pay off interest, if they are able to, before it capitalizes, that they are not obligated to borrow the full amount for which they are eligible, and that Federal student loans tend to provide more benefits and safeguards than private education loans.

The Empowering Students Through Enhanced Financial Counseling Act provides comprehensive information to Pell Grant recipients so that they understand the terms of the grants and the circumstances in which they may have to repay the grants. The bill also provides improved information to parents who borrow PLUS Loans to cover the costs of a child's education. By providing more frequent information to loan borrowers and extending counseling to parents and Pell Grant recipients, this bill will help more people take steps to reduce borrowing and prepare to repay their student loans successfully.

Furthermore, this legislation requires a longitudinal study of the effects of loan counseling. The study will examine whether better counseling contributes to a reduction in borrowing, a decrease in delinquencies and defaults, and an increase in program completion. Importantly, the effects of loan counseling will be disaggregated by race, gender, and income--allowing policymakers to determine whether enhanced counseling is benefiting all loan borrowers.

Once again, I would like to thank Congressman Guthrie, Chairman Kline, and Ranking Member Scott for their partnership on this legislation and their commitment to making college more affordable and accessible. Congress has a lot of work to do, but the Empowering Students Through Enhanced Financial Counseling Act is an important step that will help more students navigate the student loan market and build successful futures.

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