CHAMPAIGN – New accountability standards for private loan companies will soon be in place across the state, helping students make more informed choices about the loans they take out to pay for college, thanks to a measure led by Senate Higher Education Chair Scott Bennett (D-Champaign).

“This new law requires private loan companies to help students better understand the type and amount of grants and loans they qualify for,” Bennett said. “This law also gives students the necessary resources to see how college costs could impact their loan payments down the road and ensure they understand what their student borrowing really means.”

Bennett introduced the Know Before You Owe Private Education Loan Act, which requires private lenders to confirm with a potential borrower’s school that the student’s tuition, housing and other costs are not covered by other sources of financial aid. Additionally, the legislation requires colleges and universities to notify students about their federal loan eligibility before certifying private loans.

Bennett worked closely with the Illinois attorney general’s office to craft the legislation.

“Private student loans are more expensive and more difficult for borrowers to repay. As we have seen during the pandemic, the relief that comes with federal student loans is particularly critical during an economic downturn,” Illinois Attorney General Kwame Raoul said. “This new law ensures that students and families are aware of the benefits of federal loans and whether they are eligible – before they take out private loans.”

The legislation – House Bill 2746 – was signed into law Thursday and takes effect immediately.