Know Before You Owe Federal Student Loan Act of 2025

This bill requires colleges to provide prospective federal student loan borrowers with detailed financial counseling before disbursement, including estimates of monthly payments relative to income, total projected debt (including private loans and future costs), and warnings about high debt-to-income ratios. It mandates that students manually confirm their desired loan amount before certification, emphasizing borrowing only what's necessary. During periods when repayment isn't required (e.g., while enrolled or in deferment), lenders must send quarterly statements showing loan balances, interest rates, accumulated interest, and explanations about how unpaid interest capitalizes upon repayment. These provisions directly affect all federal student loan borrowers by increasing transparency about loan terms and long-term financial impact before and during repayment.