Know Before You Owe Federal Student Loan Act of 2025
Sponsored By: Representative Miller-Meeks
Introduced
Summary
Personalized pre-loan counseling would be required for federal student borrowers and students would have to manually confirm the exact dollar amount they want to borrow before a loan is certified. The counseling would give program-specific, after-tax monthly payment estimates and clear warnings and options to limit borrowing.
Show full summary
- Students: Borrowers would receive an estimate of their monthly payment after taxes, living expenses using Bureau of Labor Statistics Consumer Expenditure Survey data, health insurance, and other costs. Counseling must note total estimated student debt and warn that higher debt-to-income ratios make repayment harder.
- Institutions: Eligible schools would have to require students to enter the exact dollar amount of Federal Direct Loan funds they want before the school certifies the loan for disbursement, with limited exceptions for consolidation and certain PLUS loans.
- Financial aid offices: Offices would need to update counseling materials and systems to use program starting wages, include known private debt, and estimate future debt needed to finish a program.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Better counseling and loan amount check for students
This bill would require schools to give stronger pre-loan counseling before the first disbursement of each new Federal Direct Loan (or the first in an award year if you take multiple new loans). The counseling would estimate your monthly loan payment and compare it to your after-tax pay and living costs (using Bureau of Labor Statistics data), health insurance, and other expenses. It would use starting-wage data for your program when available and your estimated total student debt (Federal, known private, and future borrowing needed to finish). It would also urge borrowing the minimum, warn about high debt-to-income ratios, offer ways to cut borrowing, and stress on-time graduation. After counseling, you would have to type in the exact Direct Loan dollar amount you want during award acceptance, before the school certifies the loan. This would not apply to Direct Consolidation loans or PLUS loans made on a student’s behalf.
Quarterly student loan statements in deferment
This bill would require your lender or servicer to send a plain-language statement every quarter any time you do not have to make payments on your federal student loans (for example, in school, deferment, or forbearance). The statement would list each loan’s original amount, current balance, and interest rate, plus totals across loans. It would show interest added since the last statement and total interest to date. It would explain that unpaid interest can be capitalized, how to make voluntary payments, and include contact and website information. It would note that even small payments can help reduce interest.
Sponsors & CoSponsors
Sponsor
Miller-Meeks
IA • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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