On Thursday, July 24, a bipartisan bill introduced by Congressman Brett Guthrie passed the House by a vote of 405-11.
H.R. 4984, the Empowering Students through Enhanced Financial Counseling Act, will reform the current guidelines to require annual counseling for student borrowers and enhance their understanding of financial aid.
A June 2014 report from the Federal Reserve Bank of New York reported that less than 50 percent of survey respondents with student debt had what they considered a high “loan literacy.” H.R. 4984 seeks to change that by providing unique and individualized financial counseling to all student borrowers.
“A good education is very important in today’s job market, but so is being financially literate,” said Guthrie. “My bill ensures students have the knowledge to understand how much money they are borrowing, which financial options they should draw from first, and the implications of their future debt load and repayment scenarios. We have seen that students who are equipped with this knowledge leave school with significantly lower debt burdens.”
H.R. 4984, which passed out of committee on July 10 on a bipartisan basis, is part of a series of bills to guide the reauthorization of the Higher Education Act.