S. 4686Senate118th Congress (2023-2025)In Committee

Transparency in Student Lending Act

AI-Generated Summary

Updated January 20, 2026 at 5:53 PM UTC

The Transparency in Student Lending Act changes the Higher Education Act so that schools and loan servicers must tell borrowers the annual percentage rate (APR) of any federal student loan before the money is disbursed. The required disclosure must be in writing and include details such as the loan amount, interest rate, term, fees, and any capitalized interest. This aims to give students clearer information about the true cost of their loans.

Key Provisions

Amends the Higher Education Act to add a new disclosure requirement for federal student loans.
Before a loan is disbursed, the school or loan contractor must give the borrower a written, keepable statement of the loan’s annual percentage rate (APR).
The APR disclosure must reflect the loan amount, the stated interest rate, the standard term for that loan type, any fees or extra costs, and any interest that will be capitalized.
The rule applies to each institution and any contractor that handles federal student loans.

Legislative Activity

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2 earlier actions

SenateCommittee Latest Action

Committee on Banking, Housing, and Urban Affairs. Hearings held.

Banking, Housing, and Urban Affairs Committee

September 17, 2024

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SenateIntro Referral

Introduced in Senate

July 11, 2024

SenateIntro Referral

Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Health, Education, Labor, and Pensions Committee

July 11, 2024

SenateCommittee

Committee on Banking, Housing, and Urban Affairs. Hearings held.

Banking, Housing, and Urban Affairs Committee

September 17, 2024

Bill Text

Latest available legislative text

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Introduced in SenateIssued July 11, 2024

118th CONGRESS

2d Session

S. 4686

IN THE SENATE OF THE UNITED STATES

July 11 (legislative day, July 10), 2024

Mr. Barrasso (for himself and Ms. Lummis) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the Higher Education Act of 1965 to require the disclosure of the annual percentage rates applicable to Federal student loans.

Short title

This Act may be cited as the Transparency in Student Lending Act.

Required disclosures

Section 455(p) of the Higher Education Act of 1965 (20 U.S.C. 1087e(p)) is amended—

(1)

by striking Each institution and inserting the following:

(1)

In general

Each institution

; and

(2)

by adding at the end the following:

(2)

Disclosure of APR prior to disbursement

In addition to the disclosures required under paragraph (1), each institution and contractor described in such paragraph shall disclose to a borrower before disbursement of a loan made under this part, in writing and in a form the borrower may keep, the annual percentage rate applicable to the loan, taking into account—

(A)

the amount of the loan;

(B)

the stated interest rate of the loan;

(C)

the standard term for a loan of the same type;

(D)

any fees or additional costs associated with the loan; and

(E)

any capitalization of interest on the loan.