Washington state is officially part of the vanguard targeting the student loan crisis, and attempting to battle excessive debt in a relatively new way.
Following Indiana, Nebraska and Wisconsin, Olympia’s state legislature recently passed the Student Loan Transparency Act with bipartisan support (a term we rarely hear these days), which will require all colleges and universities in the state (Public and Private) to start notifying their students EXACTLY how much money they owe, and what their monthly payments will be after they’ve graduated from college.
The Student Loan Transparency Act requires all Washington schools to begin issuing notifications on July 1st, 2018, and stipulates that the schools must notify their students each and every time they’re sent an offer to take out new or revised student loans as part of state and federally-funded financial-aid packages.
This law also requires schools to tell the student how close they are to hitting their Federal direct-loan borrowing limit, which may not sound like a big deal, but which is extremely important for anyone looking to eventually get their loans discharged via one of the Federal Loan Forgiveness Programs, and for anyone looking to avoid Private loans altogether.
Washington’s State Senate claims that part of the problem with excessively large student loan debt is that students simply don’t know how much they’ve borrowed, or what they’ll be forced to pay back each month after they graduate, so they end up digging themselves into inescapable debt by borrowing far more than they should.
I am in complete agreement with Olympia that students simply aren’t well-informed enough to make good long-term financial decisions about how much they should borrow, so I fully support this initiative.
By: Tim Marshall
Tim's experience struggling with crushing student loan debt led him to create the website Forget Student Loan Debt in 2011, where he offers advice, tips and tricks for paying off student loans as quickly and affordably as possible.