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SPRINGFIELD – To help students make more informed choices about the loans they take out to pay for college as well as establish new accountability standards for private loan companies, Senate Higher Education Committee Chair Scott Bennett (D-Champaign) passed a measure through the Senate Friday.

“We have some of the best and brightest in our state, and yet many of them still struggle to navigate their student loan options,” Bennett said. “By giving students additional tools to see what their student borrowing really means, we can lessen some of the uncertainty they face after graduation.”
 
Bennett introduced the Know Before You Owe Private Education Loan Act, which requires private lenders to confirm with a potential borrower’s school that the student’s tuition, housing and other costs are not covered by other sources of financial aid. Additionally, the legislation requires colleges and universities to notify students about their federal loan eligibility before certifying private loans.
 
Bennett worked closely with the Illinois attorney general’s office and State Representative Katie Stuart (D-Edwardsville) to craft the legislation.

“Private student loans are more expensive and more difficult for borrowers to repay. As we have seen during the pandemic, the relief that comes with federal student loans is particularly critical during an economic downturn,” Illinois Attorney General Kwame Raoul said. “This legislation ensures that students and families are aware of the benefits of federal loans and whether they are eligible – before they take out private loans.”

"Current students are graduating with higher levels of debt than in the past, and not all student debt is created equal,” said State Representative Katie Stuart (D-Edwardsville), the sponsor of the bill in the House. “While federal student loans offer deferment options, forgiveness programs, and income-based repayment plans, these are not always available through private lenders. This bill would ensure students exhaust their federal options first, helping them avoid expensive, often unnecessary, private loans.”
 
House Bill 2746 passed the Senate with a vote of 58-0.

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