A bill introduced by U.S. Senator Joe Donnelly aims to improve financial literacy among college students.
Almost 1-million Hoosiers are thought to have student loans. Donnelly hopes the “Empowering Student Borrowers Act” will help students understand how much money they’re borrowing, as well as their repayment options.
He says the success of similar changes at the University of Indiana indicates billions of dollars could be saved.
“It would be something that schools should take a look at, a serious look at and I would hope that by example they could see it,” says Donnelly. “Do I have anybody lined up right now? I don’t, but if I was a university, I’d be lining up to learn everything that I could.”
The legislation requires the Department of Education to maintain records on best practices for colleges and universities to provide information to their students. In addition, targeting first time and part-time students is also a priority of the legislation.
The Indiana House and Senate recently passed similar legislation. Donnelly says not forcing colleges to provide the information avoids unnecessary regulation.
“We want to make the option available,” says Donnelly. “It would seem to me that if you are running a college or university you’d want to do this, but we’re not in the business of forcing them to.”
Recent studies have shown students underestimate how much debt they incur while attending college. Donnelly believes that the more students know, the better off they’ll be.
Donnelly says financial literacy is important in receiving a college education to allow residents to secure jobs with adequate pay.