[Congressional Record (Bound Edition), Volume 158 (2012), Part 9]
[House]
[Page 13059]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        KNOW BEFORE YOU OWE ACT

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Pennsylvania (Ms. Schwartz) for 5 minutes.
  Ms. SCHWARTZ. As August begins, millions of young people across the 
country are preparing to head off to college. Fall brings not only a 
return to course selection and roommates and football games but also to 
high college tuition bills. In my home State of Pennsylvania, the 
average cost of tuition and fees tops $12,000 for a public 4-year 
school and $32,000 a year for a private university. These high costs 
force 70 percent of Pennsylvania college students to take out student 
loans.
  One of the biggest decisions facing students and college graduates is 
not just the amounts they borrow but who their lenders will be and 
whether they will be private lenders or Federal loans. Federal loans 
are simply a better deal. They offer lower, fixed interest rates, 
consumer protections and manageable repayment options. Private student 
loans, on the other hand, typically have uncapped, variable rates, 
hefty fees and few consumer protections. From 2001 to 2008, the private 
student loan market exploded, increasing from $5 billion to $20 
billion. Lenders loosened underwriting standards and often cut school 
financial aid offices out of the process.
  While students may need private loans, they should know the 
differences between private lenders and Federal loans and be fully 
informed of the differences in cost and obligation. Unfortunately, 
right now, a majority of student loan borrowers who are turning to more 
expensive student loan programs of private options do so without fully 
exhausting all of the Federal student loan options available to them. 
This means that student borrowers unnecessarily take on increased 
costs.
  That's why I've joined with my colleagues, Representatives Jared 
Polis and Tim Bishop, to introduce the Know Before You Owe Act in order 
to make sure that students and their families have access to vital 
information regarding their student loan programs. The legislation 
requires schools to counsel students on the financial aid options 
available to them, and it requires private lenders to adopt commonsense 
steps to protect student borrowers. The Know Before You Owe Act will 
empower students and their families to make informed decisions about 
financing their educations.
  Access to higher education is a top priority for middle class 
families. They know that higher education is one of the keys to being 
able to succeed in a competitive 21st-century marketplace. They are 
willing to invest in their futures by taking out student loans in order 
to afford college. We need to ensure that students have full and 
complete information about the most affordable student loan options 
available to them in order to fight back against those who might take 
unscrupulous advantage of families facing tough financial decisions.
  I urge my colleagues to join with me in supporting this important 
legislation and to better ensure that millions of Americans can afford 
college without taking unnecessary long-term financial hardship and 
risk.

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