Arizona Rep. Matt Salmon introduced this week the Ensure Responsible Borrowing Act, a bill to ensure students are better informed to make financial decisions and only borrow what they need.
“Knowledge is power,” said Salmon in a statement released Tuesday. “Nowhere is that more true than in our finances, and in a time with astronomical student loan debt, we need to do all we can to empower students. Today, many college graduates are paying an average of 20% of their incomes toward their student loan debt. I’m proposing a simple change that would help student borrowers better understand what exactly they’re getting themselves into.”
“The Ensure Responsible Borrowing Act would enable students to get a better picture of their financial futures before authorizing future loans.” Salmon concludeed, “It would also require annual acceptance of new loans—ensuring that no student is put on autopilot potentially amassing large amounts of unnecessary debt.”
According to Salmon, 60 percent of college graduates aged 35 and younger “expect to be paying off student loans into their 40s.” Salmon says the Ensure Responsible Borrowing Act serves as a step toward addressing the rising costs of student loan borrowing in two ways. The first permits individual institutions of higher education to further advise students seeking federal student loans. The second aims to keep students informed on their borrowing by requiring proactive annual acceptance of their loan.