# Know Before You Owe Federal Student Loan Act of 2025

This bill is designed to make sure students understand exactly what they're borrowing before they take out federal student loans. Right now, many students accept loan offers without fully grasping how much they'll owe or what their monthly payments might look like after graduation. This bill tries to fix that by requiring colleges to give students much more detailed information upfront and making sure students actively confirm the exact amount they want to borrow.

The main changes involve what colleges must tell students before they receive their first loan disbursement. Instead of just basic loan information, schools now have to show students an estimate of what their monthly loan payment will be compared to their expected starting salary for their field of study. The counseling materials must also include their total debt picture—combining federal loans, private loans they already have, and what they'll likely need to borrow to finish their degree. Students will also get warnings about debt-to-income ratios and reminders that they don't have to borrow the full amount they're eligible for. Additionally, the bill requires students to manually enter the exact dollar amount they want to borrow, rather than just accepting a default offer, making the decision more intentional and harder to do on autopilot.

The bill also requires loan servicers to send students quarterly statements while they're still in school or during periods when they don't have to make payments. These statements will show how much interest is accumulating and explain that making even small voluntary payments while in school can save them thousands of dollars over time. This addresses a common problem where students don't realize their loans are growing through interest charges before they even graduate, and they don't know they have the option to pay down that interest early.