Student loans are the hot topic of the 2020 race. Democratic candidates, in particular, are discussing a wide range of plans to address the looming student debt crisis.
But if Republicans disagree on how student debt and the cost of college should be handled, they certainly seem to agree something needs to be done. Republican Senator Chuck Grassley of Iowa has proposed three new pieces of legislation.
The Net Price Calculator Improvement Act
Grassley proposed this act in March of 2019. This act would:
- Require academic institutions to place net-cost calculators in high-traffic areas of their site. The purpose is to give them a better way to calculate and compare the costs of college.
- Encourage the Department of Education to develop a “universal calculator” to help students compare the costs of multiple institutions all at once.
Grassley says that one of his intentions behind presenting this bill is to force colleges to consider costs more as they try to compete for students.
The bill is currently with the Health, Labor, Education, and Pensions committee. It doesn’t seem like it would be a particularly controversial law to pass.
The True Cost of College Act
Grassley joined forces with Tina Smith, a Democratic Senator from Minnesota, and Joni Ernst, who is also a Senator from Iowa. This makes it a rarity in American politics: a truly bipartisan bill.
Research from the Institute for College Access and Success indicates financial aid award letters “fall short of being clear, comparable, and consumer-friendly.” This act is meant to address the problem.
It would require institutions to use a universal, uniform financial aid offer letter that provides information on the costs of college, the amount of grant money the student would receive, and the amount the student would be responsible for paying, including loans.
The goal is to increase transparency and clarity so students understand what they’re getting into before they take out any loans.
The Know Before You Owe Act
Grassley introduced this bill in March too. It addresses the student loan counseling process. It would:
- Require counselors to give students an estimate of their projected monthly payment compared to their discretionary income upon graduation after taxes.
- Require them to give students an assessment of living expenses based on starting wages for that student’s program of study.
- The estimated total student loan debt the student will likely take out to complete the program.
- Requires counselors to give students a statement that indicates they should borrow the minimum amount necessary to cover expenses and that the student does not have to accept the full amount of loans offered.
- Include warnings about the borrower’s debt-to-income ratio and the impact it can have on the student’s future.
- Includes options for reducing borrowing through scholarships, reduced expenses, work-study or other work opportunities.
- Stress the importance of graduating on time to avoid additional borrowing, as well as the course load necessary to graduate on time, with information on the impact of adding a year of study.
Teens aren’t known for their financial literacy (or restraint), but this is all important information for students to have.
No Rest for the Weary
None of these bills address the debt load that current students are laboring under. Borrowers who have already graduated will have to rely on other forms of financial relief.