ENZI INTRODUCES BILL TO HELP FEDERAL STUDENT LOAN BORROWERS UNDERSTAND, MANAGE DEBT

Washington D.C. – U.S. Senator Mike Enzi, R-WY, Ranking Member of the Senate Health, Education, Labor and Pensions Committee (HELP Committee), today introduced legislation to assist student borrowers and their families by ensuring that they have an exit strategy to make sound repayment decisions and manage their loan debts after graduation. “When students graduate and step into the real world, they need to understand how to manage their student loan debts,” Enzi said. “With the increasing debt level of many students, borrowers must have good options for managing debt, and good information on the options available so they can make wise, informed decisions.” “This bill will give student borrowers better, clearer information to develop smart exit strategies for repaying their federal loans. It will help students better manage their debt and help them make smarter decisions, not add more repayment plans and confusing choices.” The “Student Information Means a Positive Loan Experience (SIMPLE) Act” clarifies and simplifies student loan repayment plans, by requiring lenders to provide borrowers with better information about the impact of temporarily delaying repayment. It also expands the information provided to students about their loans during exit counseling, given shortly before they graduate. The SIMPLE bill is co-sponsored by Senator Lamar Alexander (R-TN), Senator Richard Burr (R-NC), Senator Johnny Isakson (R-GA), and Senator Wayne Allard (R- CO). Key provisions of the bill include:• Expanding the availability of extended repayment plans to borrowers who have at least $20,000 in student loans debt, instead of current threshold of $30,000;• Providing borrowers with the opportunity to pay only the interest on their loans for the first two years of repayment, an option available with any repayment plan;• Requiring lenders to provide borrowers whose loan payments are postponed with information on the total amount of principal and interest to be paid on the loan;• Revising the definition of economic hardship raising the eligibility cut off point to 150 percent of the poverty line and taking family into account when making the determination; and,• Specifying that exit counseling must include a discussion of the different features of each available repayment plan, sample information showing the difference in interest paid and total payments under each plan, average anticipated monthly payment amounts, and the ability of the borrower to change repayment plans. ####