A bill for an act concerning information regarding certain state and federal student loan programs.

2025-2026 Regular Session

HF 703 enhances transparency in Iowa student loans by requiring clear comparisons of interest rates, helping students make informed borrowing decisions.

Committee report approving bill, renumbered as HF 703.

#studentloans

Purpose and Intent

HSB 152, now known as HF 703, is a proposed bill introduced in Iowa on February 11, 2025. The primary aim of the bill is to enhance transparency and accessibility of information regarding state and federal student loan programs, specifically focusing on the comparison of interest rates and terms between different loan options available to students.

Key Provisions

The bill includes several important provisions that require action from both the Iowa Student Loan Liquidity Corporation and the Iowa Department of Education:

Information Disclosure:

The Iowa Student Loan Liquidity Corporation is mandated to provide the Iowa Department of Education with specific information, including:
- An estimate of the annual percentage rate (APR) for the federal Direct PLUS loan.
- The assumptions used to calculate this estimate.
- Links to the corporation's website that details possible APRs for the College Family Loan and Partnership Loan.
- A comparison chart of the terms and conditions of the federal Direct PLUS loan against the College Family Loan and Partnership Loan.

Accuracy Verification:

Upon receiving the required information, the Iowa Department of Education must verify the accuracy of the information provided in the comparison chart and notify the corporation of any inaccuracies.

Public Disclosure:

If the Department determines that either the College Family Loan or the Partnership Loan offers a lower APR than the federal Direct PLUS loan, it is required to publish a statement on its website. This statement must include:
- An explanation that the supplemental student loan program (including the College Family Loan and Partnership Loan) offers a lower APR than the federal Direct PLUS loan.
- The estimated APR for the federal Direct PLUS loan.
- Links to the corporation's website for further information on loan options.

Affected Parties

Students and Families: The bill is designed to benefit students and their families by providing clearer information on loan options, potentially leading to more informed borrowing decisions.

Iowa Student Loan Liquidity Corporation: This entity will have new reporting obligations to the Iowa Department of Education.

Iowa Department of Education: The department will take on the responsibility of verifying loan information and ensuring that accurate comparisons are made available to the public.

Legislative Timeline

February 11, 2025: Bill introduced and referred to the Higher Education committee.

February 18, 2025: Subcommittee meeting held.

February 19, 2025: Subcommittee recommends passage of the bill.

February 26, 2025: Committee report recommending passage; committee vote results in 10 Yeas and 1 Nay.

February 28, 2025: Committee report approving the bill, renumbered as HF 703.

Conclusion

HSB 152 (HF 703) aims to improve the clarity and accessibility of student loan information in Iowa, helping students make better financial decisions regarding their education funding. By mandating transparency in loan comparisons, the bill seeks to empower borrowers with the knowledge needed to choose the most advantageous loan options available.

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