Empowering Students Through Enhanced Financial Counseling Act

This bill modifies student loan counseling requirements applicable to institutions of higher education (IHEs).

Currently, an IHE must provide entrance counseling to a student who is a first-time federal student loan borrower. This bill replaces required entrance counseling with required annual financial counseling concerning information on the terms, conditions, and responsibilities of the grant or loan. Also, it expands the required recipients of such annual counseling to include, in addition to student borrowers, Pell Grant recipients and parent PLUS Loan borrowers.

In additional, the bill revises, expands, or establishes specific annual counseling information requirements for student borrowers, Pell Grant recipients, or parent PLUS Loan borrowers.

The bill revises and expands exit counseling information requirements for borrowers to include an outstanding loan balance summary, the anticipated monthly payments under standard and income-driven repayment plans, an explanation of the grace period preceding repayment, the option to pay accrued interest before it capitalizes, the right to request an annual credit report, a cautionary statement about third-party student debt relief companies, and loan servicer contact information.

It directs the Department of Education to maintain a consumer-tested online counseling tool that provides annual and exit counseling.

The Institute of Education Sciences must study the impact and effectiveness of exit counseling, annual counseling, and the online counseling tool.