Knowledge is power – there’s no denying that. Countless student loan borrowers, however, have no idea how much their student loans actually cost them over the years.
Aiming to increase literacy when it comes to student loans, the State Senate in Washington began public hearings last week over a bill that would increase borrowers’ awareness about the current status of their student loans as well as the cost of borrowing money to attend college in general.
Under the bill, students would receive periodic notifications about the balances on their student loans via email or in writing. In addition, the bill encourages schools to enhance their financial literacy training, boost counseling on financial aid, and provide other awareness building resources for college students.
According to the authors of the bill, which includes a slew of Washington State Senators, providing more information about the cost of borrowing and the balances of student loans will help families in the state make informed decisions about how much to borrow and will make them more prepared when it’s time to pay back those loans.
One of the knocks on student loans in general is that they can be very confusing for borrowers who have multiple bills coming each month. Since borrowers don’t have to worry about paying back the loans until 6 months after graduation, many forget about repayment and are surprised when the first bills come in the mail after their grace periods are over.
Student loan borrowers in Washington owe an average of $24,997, which is below the national average of $28,400, but is still a lot to pay back after graduation.
>> Read More: Average student loan debt statistics
“We are trying to make the costs of higher education more transparent and have more students understand the financial obligation as they accumulate it, rather than wait until graduation day to figure out how much they owe,” Senator Barbara Bailey said at a hearing.
If the bill wins approval it would take effect January 1st of 2018. One sticking point may be the cost. Clint McCarthy, a coordinator and analyst for the Senate Higher Education Committee, said at the hearing that it would cost $429,000 to get the bill going and $112,000 each year to cover the costs for the state schools to make the student loan balance notifications.
Author: Donna Fuscaldo
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