SPRINGFIELD, Ill. – Taking a step to tackle the student debt crisis, state Rep. Katie Stuart, D-Edwardsville, is sponsoring legislation that would help students make more informed choices about the loans they take out to pay for college, as well as establish new accountability measures for private loan companies.
“Today’s students are graduating with higher levels of debt than in the past, and unfortunately there are some loan companies that are taking advantage of them,” said Stuart. “My bill would help ensure students utilize federal loan programs first before taking out private loans, which are generally more risky and expensive.”
Stuart introduced the Know Before You Owe Private Education Loan Act, House Bill 2746, which requires private lenders to confirm with a potential borrower’s school that the student’s tuition, housing and other costs are not covered by other sources of financial aid. The measure additionally requires colleges and universities to notify students about all of their federal loan eligibility before certifying private loans. The measure passed the House Higher Education Committee with bipartisan support and now moves to the full House for consideration.
“Private student loans are more expensive and more difficult for borrowers to repay. As we have seen during the pandemic, the relief that comes with federal student loans is particularly critical during an economic downturn,” said Illinois Attorney General Kwame Raoul, who is working with Stuart on the bill. “This legislation ensures that students and families are aware of the benefits of federal loans and whether they are eligible – before they take out private loans.”