A bill for an act concerning information regarding certain state and federal student loan programs.(See HF 703.)
HSB152, titled the Increasing Student Financial Aid Awareness Act, would require the Iowa Student Loan Liquidity Corporation to provide the Iowa College Aid bureau with annual information about the federal Direct PLUS loan and the state’s college family loan and partnership loan programs. The required information includes an estimate of the federal Direct PLUS loan APR, the assumptions used to make that estimate, the corporation’s website address for APR information on its state loan products, and a comparison chart of the terms and conditions of the federal and state loan options.
After receiving that information, the bureau of Iowa College Aid would review the estimate and assumptions through the superintendent of banking, check the accuracy of the comparison chart, and determine whether the state loan programs may offer a lower APR than the federal Direct PLUS loan. If so, the bureau would have to post a statement on its website explaining that the state supplemental student loan program may have a lower APR, along with links to the relevant state loan information. The bureau would also have to send the same information to eligible Iowa colleges and universities by October 1 each year, and those institutions would have to include it in financial aid offers to prospective students and families.
The bill also requires institutions to include a cautionary statement that students and families should use federal student loan programs before considering a federal Direct PLUS loan, college family loan, or partnership loan. The disclosure obligation would continue only while the bureau determines that the state loan programs may offer a lower APR than the federal Direct PLUS loan; if that changes, the bureau must remove the website statement and notify institutions that the extra disclosure is no longer required.
The bill’s impact on state law is to create a new chapter in Iowa Code governing student loan information-sharing, oversight, and required disclosures tied to state-sponsored supplemental loans. It imposes new duties on the bureau, the student loan corporation, and participating higher education institutions, but it does not directly change loan eligibility or loan terms. Instead, it changes how those loans are marketed and presented to students and families, with the goal of increasing awareness of state loan options and comparing them to federal borrowing.
The general sentiment appears favorable, with the House Committee on Higher Education reporting the bill by a 10-1 vote. The bill’s structure suggests a consumer-information and transparency focus, but it also includes a built-in preference for federal student aid first, which may have helped broaden support. The main point of contention is likely the bill’s comparative framing of state versus federal loans and the requirement that colleges include the disclosure in financial aid offers, since that could be seen as promoting state loan products while also warning students to exhaust federal options first.
HSB152 would add a new Iowa Code chapter requiring the Iowa Student Loan Liquidity Corporation, the Iowa College Aid bureau, and participating institutions of higher education to exchange and publish information about the federal Direct PLUS loan and Iowa’s college family loan and partnership loan programs. It creates ongoing disclosure, review, and notification duties, including website postings and required language in financial aid offers, but does not alter loan terms, borrowing limits, or eligibility rules.
The available voting history suggests the bill was generally well received in committee, passing the House Committee on Higher Education 10-1. No transcript excerpts are available, but the bill’s emphasis on transparency, consumer awareness, and comparison shopping for student loans indicates a broadly supportive policy approach. The inclusion of a statement encouraging use of federal student loan programs first may have helped balance concerns about promoting state loans.
The likely areas of contention are the bill’s requirement that colleges include state loan information in financial aid offers and the comparative claim that the state loan programs may offer a lower APR than the federal Direct PLUS loan. Critics could question whether the state should be directing institutions to advertise specific loan products, whether the APR comparison is sufficiently reliable, and whether the required disclosures could be viewed as steering students toward borrowing rather than simply informing them. Supporters appear to be those favoring greater transparency and awareness of state financial aid options.