II 

118TH CONGRESS 

1ST SESSION S. 530 

To revise counseling requirements for certain borrowers of student loans, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 27, 2023 

Mr. GRASSLEY (for himself and Ms. SMITH) introduced the following bill; 

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To revise counseling requirements for certain borrowers of 

student loans, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Know Before You Owe 

5 Federal Student Loan Act of 2023’’. 

6 SEC. 2. PRE-LOAN COUNSELING AND CERTIFICATION OF 

7 LOAN AMOUNT. 

8 Section 485(l) of the Higher Education Act of 1965 

9 (20 U.S.C. 1092(l)) is amended— 


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1 (1) in the subsection heading, by striking ‘‘EN2 TRANCE COUNSELING’’ and inserting ‘‘PRE-LOAN

3 COUNSELING’’; 

4 (2) in paragraph (1)(A)— 

5 (A) in the matter preceding clause (i), by 

6 striking ‘‘a disbursement to a first-time bor7 rower of a loan’’ and inserting ‘‘the first dis8 bursement of each new loan (or the first dis9 bursement in each award year if more than one 

10 new loan is obtained in the same award year)’’; 

11 and 

12 (B) in clause (ii)(I), by striking ‘‘an en13 trance counseling’’ and inserting ‘‘a coun14 seling’’; 

15 (3) in paragraph (2)— 

16 (A) by striking subparagraph (G) and in17 serting the following: 

18 ‘‘(G) An estimate of the borrower’s month19 ly payment amount compared to the borrower’s 

20 estimated monthly income after taxes, after liv21 ing expenses (using Consumer Expenditure 

22 Survey data from the Bureau of Labor Statis23 tics), after estimated health insurance costs, 

24 and after any other relevant expenses, based 

25 on— 


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1 ‘‘(i) the best available data on starting 

2 wages for the borrower’s program of study, 

3 if available; and 

4 ‘‘(ii) the estimated total student loan 

5 debt of the borrower, including— 

6 ‘‘(I) Federal debt; 

7 ‘‘(II) to the best of the institu8 tion’s knowledge, private loan debt al9 ready incurred; and 

10 ‘‘(III) the estimated future debt 

11 required to complete the program of 

12 study.’’; and 

13 (B) by adding at the end the following: 

14 ‘‘(L) A statement that the borrower should 

15 borrow the minimum amount necessary to cover 

16 expenses and that the borrower does not have 

17 to accept the full amount of loans for which the 

18 borrower is eligible. 

19 ‘‘(M) A warning that the higher the bor20 rower’s debt-to-income ratio is, the more dif21 ficulty the borrower is likely to experience in re22 paying the loan. 

23 ‘‘(N) Options for reducing borrowing 

24 through scholarships, reduced expenses, work25 study, or other work opportunities. 


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1 ‘‘(O) An explanation of the importance of 

2 graduating on time to avoid additional bor3 rowing, what course load is necessary to grad4 uate on time, and information on how adding 

5 an additional year of study impacts total in6 debtedness.’’; and 

7 (4) by adding at the end the following: 

8 ‘‘(3)(A) In addition to the other requirements 

9 of this subsection and in accordance with subpara10 graph (B), each eligible institution shall ensure that 

11 the student manually enter, either in writing or 

12 through electronic means, the exact dollar amount of 

13 Federal Direct Loan funding under part D that 

14 such student desires to borrow. 

15 ‘‘(B) The eligible institution shall ensure that 

16 the student carries out the activity described in sub17 paragraph (A)— 

18 ‘‘(i) in the course of the process used by 

19 the institution for students to accept a student 

20 loan award; 

21 ‘‘(ii) prior to the institution certifying a 

22 Federal Direct Loan under part D for disburse23 ment to a student (other than a Federal Direct 

24 Consolidation Loan or a Federal Direct PLUS 

25 loan made on behalf of a student); and 


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1 ‘‘(iii) after ensuring that the student has 

2 completed all of the pre-loan counseling require3 ments under this subsection.’’. 

4 SEC. 3. REQUIRED PERIODIC DISCLOSURES DURING PERI5 ODS WHEN LOAN PAYMENTS ARE NOT RE6 QUIRED. 

7 Section 433 of the Higher Education Act of 1965 (20 

8 U.S.C. 1083) is amended— 

9 (1) by redesignating subsection (f) as sub10 section (g); and 

11 (2) by inserting after subsection (e) the fol12 lowing: 

13 ‘‘(f) REQUIRED PERIODIC DISCLOSURES DURING PE14 RIODS WHEN LOAN PAYMENTS ARE NOT REQUIRED.— 

15 During any period of time when a borrower of one or more 

16 loans, made, insured, or guaranteed under this part or 

17 part D is not required to make a payment to an eligible 

18 lender on the borrower’s loan from that eligible lender, 

19 such eligible lender shall provide such borrower with a 

20 quarterly statement that includes, in simple and under21 standable terms— 

22 ‘‘(1) the original principal amount of each of 

23 the borrower’s loans, and the original principal 

24 amount of those loans in the aggregate; 


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1 ‘‘(2) the borrower’s current balance, as of the 

2 time of the statement, as applicable; 

3 ‘‘(3) the interest rate on each loan; 

4 ‘‘(4) the total amount the borrower has paid in 

5 interest on each loan; 

6 ‘‘(5) the aggregate amount the borrower has 

7 paid for each loan, including the amount the bor8 rower has paid in interest, the amount the borrower 

9 has paid in fees, and the amount the borrower has 

10 paid against the balance; 

11 ‘‘(6) the lender’s or loan servicer’s address, toll12 free phone number, and webpage for payment and 

13 billing error purposes, including information about 

14 how a borrower can make voluntary payments when 

15 a loan is not in repayment status; 

16 ‘‘(7) an explanation— 

17 ‘‘(A) that the borrower has the option to 

18 pay the interest that accrues on each loan while 

19 the borrower is a student at an institution of 

20 higher education or during a period of 

21 deferment or forbearance, if applicable; and 

22 ‘‘(B) if the borrower does not pay such in23 terest while attending an institution or during 

24 a period of deferment or forbearance, any accu25 mulated interest on the loan will be capitalized 


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1 when the loan goes into repayment, resulting in 

2 more interest being paid over the life of the 

3 loan; 

4 ‘‘(8) the amount of interest that has accumu5 lated since the last statement based on the typical 

6 installment time period and the aggregate interest 

7 accrued to date; and 

8 ‘‘(9) an explanation that making even small 

9 payments of any unspecified amount while the bor10 rower is a student at an institution of higher edu11 cation, or during a period of deferment or forbear12 ance, if applicable, can help to offset interest accrual 

13 over the life of the loan.’’. 

14 SEC. 4. CONFORMING AMENDMENTS. 

15 (a) PROGRAM PARTICIPATION AGREEMENTS.—Sec16 tion 487(e)(2)(B)(ii)(IV) of the Higher Education Act of 

17 1965 (20 U.S.C. 1094(e)(2)(B)(ii)(IV)) is amended— 

18 (1) by striking ‘‘Entrance and exit counseling’’ 

19 and inserting ‘‘Pre-loan and exit counseling’’; and 

20 (2) by striking ‘‘entrance and exit counseling’’ 

21 and inserting ‘‘pre-loan and exit counseling’’. 

22 (b) REGULATORY RELIEF AND IMPROVEMENT.—Sec23 tion 487A of the Higher Education Act of 1965 (20 

24 U.S.C. 1094a) is amended by striking ‘‘entrance and exit 


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1 interviews’’ and inserting ‘‘pre-loan and exit interviews’’ 

2 each place the term appears. 

Æ 


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