When Students Take Out Loans, Some States Do the Math for Them
By Katherine Long
Starting next year, Washington college students who take out student loans will get an email or letter from their school telling them how much they owe and how much their monthly loan payments will be after graduation.
The notification is part of a new bill, the Student Loan Transparency Act, which passed with bipartisan support in the state Legislature last week.
The notifications will begin July 1, 2018, and must be provided every time a student receives an offer of a new financial-aid package that includes a new or revised student loan. The notifications will also show how close a student is coming to the federal direct-loan borrowing limit. Undergraduates can borrow up to $5,500 per year in federal Perkins loans and between $5,500 and $12,500 in direct federal subsidized and unsubsidized loans.
Lawmakers said students often don't realize how high their loan payments will be after they graduate. And many students take out new loans without realizing how much they already owe.
The bill covers public and private colleges and universities. Indiana, Wisconsin and Nebraska have passed similar legislation.
The bill was requested by the state Attorney General's Office. One of its sponsors, Sen. Barbara Bailey, R-Oak Harbor, said she hoped it would cause students to think twice before taking out loans for college.
(c)2017 The Seattle Times