HB3298, titled the Know Before You Owe Federal Student Loan Act of 2025, would revise federal student loan counseling requirements under the Higher Education Act. The bill replaces the current first-time borrower “entrance counseling” framework with broader “pre-loan counseling” that would apply to the first disbursement of each new loan, or the first disbursement in each award year if multiple new loans are taken. It expands the required counseling content to include a more detailed estimate of monthly loan payments relative to expected post-tax income and living expenses, projected debt-to-income burden, the borrower’s total expected debt, and alternatives to borrowing such as scholarships, work-study, reduced expenses, and work opportunities.
The bill also requires students to manually confirm the exact dollar amount of Federal Direct Loan funds they want to borrow before the institution certifies the loan for disbursement. In addition, it would require lenders to provide quarterly disclosures during periods when payments are not required, such as in-school, deferment, or forbearance periods. Those disclosures would have to show principal, current balance, interest rate, interest paid, fees, accrued interest, and information about voluntary payments, along with warnings about interest capitalization and the benefits of making even small payments.
In terms of legal impact, the bill amends sections of the Higher Education Act of 1965 and makes conforming changes to program participation agreements and regulatory-relief provisions so that existing references to “entrance counseling” and “entrance interviews” become “pre-loan counseling” and “pre-loan interviews.” Its practical effect would be to impose additional disclosure, counseling, and borrower-confirmation duties on eligible institutions and lenders participating in federal student aid programs, while giving borrowers more information before taking on debt and during non-repayment periods.
The overall sentiment suggested by the bill text is consumer-protection oriented and generally favorable to borrower awareness and informed decision-making. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of bipartisan support or opposition in the available materials. The bill’s framing emphasizes transparency, debt avoidance, and repayment preparedness, indicating a policy approach aimed at reducing overborrowing and surprise costs.
The main points of potential contention are administrative burden and compliance complexity for colleges, lenders, and servicers, since the bill would require more detailed counseling, individualized debt estimates, manual loan-amount entry, and recurring quarterly statements. Another likely issue is whether the new disclosures and warnings meaningfully change borrowing behavior or simply add paperwork. Borrower advocates would likely support the added protections, while institutions and loan administrators may be concerned about implementation costs and operational requirements.
HB3298 would amend the Higher Education Act of 1965 to expand and rename federal student loan counseling requirements, require borrowers to affirmatively enter the exact amount they want to borrow, and mandate quarterly disclosures during periods when loan payments are not due. It would affect eligible institutions, lenders, and loan servicers participating in federal student aid programs by adding new disclosure, counseling, and certification obligations, and it would update related statutory references from “entrance” to “pre-loan” counseling and interviews.
The bill appears to have a generally pro-borrower, consumer-protection sentiment, emphasizing clearer information, debt awareness, and reduced overborrowing. No committee discussion or votes are provided, so there is no recorded legislative debate in the supplied materials to indicate formal support or opposition. Based on the text alone, the measure is framed as a transparency and accountability reform for student lending.
Likely areas of contention include the added administrative workload for schools, lenders, and servicers, especially the requirement for detailed payment-to-income estimates, manual borrower confirmation of loan amounts, and quarterly statements during nonpayment periods. Supporters would likely argue these measures help students make better borrowing decisions and understand interest accrual, while critics may question whether the mandates are overly burdensome or duplicative of existing counseling and disclosure rules. No specific named opponents or supporters appear in the provided record.