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Congressmen Cleaver and Banks Reintroduce the Student Loan Disclosure Modernization Act

Feb 13, 2019
Press Release
The bill makes it easier for student borrowers to understand the terms & conditions of their loans before signing an agreement

(Washington, D.C.) - Today, Congressman Emanuel Cleaver, II (D-MO) and Congressman Jim Banks, (R-IN) reintroduced The Student Loan Disclosure Modernization Act, HR 1161. The bill modernizes the Department of Education’s (ED) Plain Language Disclosure Form making the form simpler for student loan borrowers to understand before signing an agreement.

Under current law, the Department of Education (ED) is required to disclose to students a long list of terms and conditions of federal student loans to help educate them about the obligations they are incurring. The form, written in small print, can be at least six pages long, and contain over 6,000 words.

The Student Loan Disclosure Modernization Act would require the Plain Language Disclosure Form be simplified, consumer tested and friendly and place extra emphasis on material terms of the loan like; the finance charge, annual percentage rate (APR), and estimated monthly repayment. The bill also requires students to sign the form every time they take out a new loan, acknowledging that they have read the form and understand the terms of the loan.

“The form, often laced with legal jargon, is not serving students well and should be improved,” said Congressman Cleaver. “I’m glad Congressman Banks has joined in the fight to help student loan borrowers with this problem. Students should not be burdened with how they are going to survive after graduation due to overwhelming student loans,” said Congressman Cleaver.

“Transparency is essential for lowering the costs of higher education, and students deserve a simple and easy to understand explanation of their obligations when taking out a student loan. Congressman Cleaver has long been a leader in this effort to empower students to make the best choices regarding their educational and financial futures. I am proud to join him on this bipartisan proposal,” said Congressman Banks.

Every year millions of students take out thousands of dollars in student loans to help them pay for college. In 2018, 69% of college students took out loans, graduating with an average debt of $29,800, both private and federal debt. Furthermore 14% of parents took out Federal Parent PLUS loans to help pay for their children’s education. As of 2018, the national student loan debt stands at over $1.5 trillion. Unfortunately, many college students are unprepared for the reality of student loan debt upon graduation.

According to a 2016 Consumer Report Survey, 62% of Americans with student loan debt did not attend any financial aid information sessions prior to enrolling in college. Student loan debt has other implications. Federal Reserve researchers point to the decline of homeownership among millennials is partially due to the increased weight of student loan debt.

As stated in a recent Bloomberg article, (Bloomberg, Jan 2019), “higher student loans, early in life, lead to lower credit scores later in life, making it harder for former students to take out mortgages”. Congressman Cleaver believes that this is something that needs to be addressed. This bill is a continued step, but additional, major changes need to be taken within higher education to ensure that the system focuses on financial literacy and that students do not have crippling debt by graduation.

Congressman Cleaver initially introduced the Student Loan Disclosure Modernization Act, H.R. 4119, in 2017 with former Congressman Luke Messer (R-IN).

Emanuel Cleaver, II is the U.S. Representative for Missouri’s Fifth Congressional District, which includes Kansas City, Independence, Lee’s Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee, the Ranking Member of the Subcommittee on Housing and Insurance, and also a Senior Whip of the Democratic Caucus. For more information, please contact Heather Frierson at 816-842-4545 or A high-resolution photo of Congressman Cleaver is available here.