U.S. Sen. Charles Schumer on Wednesday unveiled a plan to make college loan applications easier to understand, arguing that high school students and their parents sometimes sign deceptive loan applications.

Schumer’s proposal, modeled after the “Schumer Box” now required on credit card applications, would require lenders to detail loan amounts, range of interest rates and any fees in a standardized, easy to read table.

Schumer said many student loan applications contain pages of fine print, hiding fees, sudden rate changes and unfair terms.

“A high school graduate in upstate New York shouldn’t need a law degree to pick a loan for college,” Schumer said in a news release.

According to Schumer’s office, current law mandates major student loan banks to provide an estimate of how much a student will have to pay in total, including interest, in order to pay off the loan - but only after the student has graduated, leaving students without a clear picture of how much they will have to pay when they sign up for a loan.

The new “Schumer Box” for student loans would have an easy to read chart, in large font using non-technical terms to describe various loan scenarios such as different loan amounts, interest rates, and payment periods.

It would explain in a concise and clear way exactly how much a student will owe, including interest, in order to pay off the loan.

Information from: www.auburnpub.com

This entry was posted on Friday, June 15th, 2007 at 10:09 pm and is filed under College Loans, Education. Tags: College, Loans, Student, Student Loan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.