Bill Overview
Title: STUDENT Act
Description: This bill requires loan disclosure forms for federal student loans to include the total amount of interest that would be paid over the life of the loan based on a standard 10-year repayment plan.
Sponsors: Sen. Ernst, Joni [R-IA]
Target Audience
Population: people involved with federal student loans
Estimated Size: 45000000
- The bill impacts individuals involved with federal student loans.
- Federal student loans are issued to students in post-secondary education in the United States.
- Given that the legislation is about loan disclosures, it will directly affect current and future student borrowers.
- This legislation primarily affects U.S. residents as it pertains to U.S. federal student loans.
Reasoning
- This policy directly impacts individuals who currently hold federal student loans or who will take out such loans in the future.
- Wellbeing is influenced by financial transparency, which can help individuals plan better and reduce stress from uncertainties concerning debt.
- There are individuals unaffected by this policy, such as those who did not attend college, those who paid for college without loans, or those who have already completed repayment.
Simulated Interviews
Student (California)
Age: 22 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 14/20
Statement of Opinion:
- I think knowing exactly how much interest will add to my loan might scare me at first, but it's useful information.
- It's better to be aware of the total cost upfront rather than being surprised later.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Engineer (Texas)
Age: 35 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- If I had known the full interest amount upfront, I might have chosen a different repayment plan.
- This transparency could help future borrowers tremendously.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Freelancer (New York)
Age: 28 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- Seeing the total interest upfront could be alarming, but it's better than feeling blindsided later.
- Understanding the full cost early would have changed how I budgeted for loan repayments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Teacher (Florida)
Age: 50 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- When I was in school, we didn't have such disclosures.
- It's a good thing for younger generations, though it doesn't affect me now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
University Student (Ohio)
Age: 19 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I haven't taken loans yet, but knowing all numbers beforehand will help me make informed choices.
- Transparency in such a big financial decision is a step in the right direction.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Self-employed (Illinois)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 8/20
Statement of Opinion:
- It would have been helpful to see the full interest amount when I was starting out.
- I believe it will help students plan better now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Software Developer (Georgia)
Age: 31 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- Having full transparency on the total interest from day one would highly affect decision-making.
- I hope it pushes more students to pay early and reduce their interest burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Nurse (Colorado)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 11/20
Statement of Opinion:
- Informed decisions are always better, and knowing full loan details is crucial.
- It might have helped alleviate some stress I felt in school regarding finances.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Barista (Washington)
Age: 29 | Gender: other
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Knowing the interest couldn't hurt, and might push me to plan better.
- I wish loans came with more built-in help for understanding debt.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Accountant (Massachusetts)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- This would be great for my children who will be taking out loans soon.
- Understanding total costs at the beginning influences better financial decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $2000000 (Low: $1000000, High: $3000000)
Year 3: $2000000 (Low: $1000000, High: $3000000)
Year 5: $2000000 (Low: $1000000, High: $3000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The fiscal impact rests on the assumption of administrative and systemic changes to student loan programs.
- The cost savings rely partly on behavioral changes among borrowers leading to a reduction in defaults.
- The policy implementation requires alignment with existing student loan systems managed by the Department of Education.