SPRINGFIELD, Ill. – Student loan borrowers would receive additional information about their financial aid options before taking out risky private loans under legislation led by state Rep. Katie Stuart, D-Edwardsville, which recently passed the House with strong bipartisan support.
“Current students are graduating with higher levels of debt than in the past, and not all student debt is created equal,” said Stuart. “While federal student loans offer deferment options, forgiveness programs and income-based repayment plans, these are not always available through private lenders. My bill would ensure students exhaust their federal options first, helping them avoid expensive, often unnecessary, private loans.”
Stuart’s Know Before You Owe Private Education Loan Act, House Bill 2746, aims to help potential borrowers make informed student loan decisions. Under the measure, private lenders would be required to confirm with a student’s school that their tuition, housing and other expenses are not already covered by another source of financial aid. Additionally, universities and colleges must notify students about any remaining federal loan eligibility before certifying private loans.
“This bill ensures students are only using private loans as a last resort to fund their education,” said Stuart. “We still have a lot of work to do to get student debt under control, but this is one step we can take to help borrowers make smart choices and protect their financial future.”