Legislation to help students and parents understand federal loan process

WASHINGTON (NEWSPLEX) -- Four members of the U.S. Senate have introduced legislation to help students make smarter decisions when it comes to financing higher education.

"In January, Senator Kaine and I met with student leaders from 20 colleges and universities across Virginia, who shared the challenges they have faced paying for college and the negative effects of crippling student loan debt," said Warner. "Several of the students had powerful personal stories about their struggles to find the money for college, and how they wished they had had better information about their options when they were taking out tens of thousands of dollars in loans to finance their education."

Across the United States, American owe more than $1.3 trillion in student loan debt, which has surpassed credit cards and auto loans as the leading source of non-housing debt.

"Navigating the student loan process can be complicated and confusing, and students deserve to have the tools they need to manage their loans in a responsible way," said Heller.

Several of the students from the meeting Kaine and Warner had urged more transparency and flexibility in handling loan and repayment programs currently available for college students.

A survey of students and recent graduates found more than a third could not recall getting financial counseling, even though it is already required before students get their first federal loan.

Counseling is also not provided to students who get Pell Grants or to parents who take out loans to help pay for their child's education.

Due to this, many graduate and are unable to manage their loans, causing financial hardship.

This legislation will ensure that all people who participate in the federal loan program will get counseling each year, directs the U.S. Secretary of Education to maintain and disseminate an online counseling tool, and provides awareness about financial obligations.

Warner has also introduced other legislation dealing with student loan debt, including a bill to make the income-based repayment plan the default option for borrowers and a bill that would allow employers to apply pre-tax income to help employees with loan payments.