Scott, Manchin Reintroduce Student Loan Disclosure Modernization Act
WASHINGTON – Yesterday, U.S. Senators Tim Scott (R-S.C.) and Joe Manchin (D-W.Va.) reintroduced the Student Loan Disclosure Modernization Act, which seeks to increase transparency for those looking to acquire student loans on a federal level. The goal is to provide applicants with a clear and succinct disclosure form, empowering them to be responsible borrowers.
“Loan transparency and financial literacy are bipartisan issues – in South Carolina alone, more than 60% of graduates face student debt after finishing their degree,” said Senator Scott. “By giving those seeking higher education more tools to see what their student borrowing really means, we can help students graduate with greater certainty and stability.”
“Right now, federal student loan disclosure forms are complicated, lengthy and filled with unhelpful legal jargon. But these disclosure forms are vital because they outline the costs and terms of potential loans, which is critical in order for students and families to understand what they’re borrowing,” said Senator Manchin. “Our bipartisan bill would simplify the student loan disclosure form while also providing personalized information on the amount students and their families are borrowing, and even an estimate for how much they may owe per month after graduating. I urge my colleagues on both sides of the aisle to support this commonsense legislation that increases transparency and empowers student loan applicants to be responsible borrowers.”
As Co-Chair of the Financial Literacy Caucus, Senator Scott strives to create a more financially aware public. Supported by the Consumer Bankers Association and the Bipartisan Policy Center, the proposed disclosures will require federal loan programs to issue plain-language disclosures, similar to the rules already applied to private lenders. By replacing the current federal disclosure form that lacks information about the total loan cost and monthly payments, the disparity between private and federal loans can be significantly reduced.
Click here to view full bill text.