Senator Dick Durbin has co-sponsored legislation in the Nation’s Capital, called the “Know Before You Owe Act of 2012.”
The bill would require schools to counsel students before they sign a private student loan, to let them know if they have any un-tapped federal loan eligibility.
Durbin says in many instances, students haven’t applied for federal aid before applying for private student loans or haven’t exhausted federal aid options.
Through the Act, private lenders would have to certify that the student is enrolled in the school and the amount eligible to be borrowed provide the borrower with a quarterly update on the loan and report information to the Consumer Financial Protection Bureau about their student loans.
