CHAMPAIGN, Ill. (WCIA) — A measure led by Senate Higher Education Chair Scott Bennett (D-Champaign) was signed into law Thursday to help with the understanding of student loans.
Officials said Bennett introduced the Know Before You Owe Private Education Loan Act, which requires private lenders to inform a borrower that tuition, housing, and other living costs are not covered by other sources of financial aid. The legislation also requires colleges and universities to notify students about their federal loan eligibility before certifying private loans.
“This new law requires private loan companies to help students better understand the type and amount of grants and loans they qualify for,” Bennett said. “This law also gives students the necessary resources to see how college costs could impact their loan payments down the road and ensure they understand what their student borrowing really means.”
“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 new law ensures that students and families are aware of the benefits of federal loans and whether they are eligible – before they take out private loans.”
The legislation takes effect immediately.