WASHINGTON, D.C. – Today, U.S. Representative Gary Peters (MI-14) offered an amendment to the Empowering Students Through Enhanced Counseling Act that promotes financial literacy by informing students of the consequences a delinquency or default on student loans can have on their financial future. The amendment passed on a voice vote.

“Recent graduates are at the top of their game in their fields, but often fall behind when it comes to financial literacy, which can have a lasting impact on their lives and take a toll on our economy," said Rep. Peters. "For more than 20 years, I worked as a financial advisor helping families plan for their future. It's important that all of our graduates understand how the decisions they make today will affect them and their families down the road - when they're finding a job, buying a car, or renting or trying to own a home. We need to promote financial literacy when it can do the most good— before a borrower gets into trouble.”

VIDEO: Rep. Peters offers an amendment to promote financial literacy for student loan borrowers.

Total federal student loan debt has reached $1.2 trillion, and student loans now make up the second largest type of consumer debt behind home mortgages. Nearly 15 percent of student loan borrowers default within three years of graduation, risking their credit scores and their ability to find employment, rent an apartment or purchase a home or car. Rep. Peters’ amendment reinforces these financial consequences to borrowers as they complete their loan counseling.

Rep. Peters is a member of the House Financial Services Committee and has been an outspoken advocate for consumer protections and financial literacy. Previously, Rep. Peters authored a provision in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (also known as the Credit Cardholder’s Bill of Rights)that allowed consumers to pay off higher interest rate credit cards first, enabling them to pay down their debt more easily. He is also a cosponsor of H.R. 4582, the Bank on Students Emergency Refinancing Act, which would allow student loan borrowers to refinance federal and private student loans to lower market-based rates established for new borrowers in the Bipartisan Student Loan Certainty Act of 2013. Current law prevents many responsible borrowers from refinancing to current lower interest rates.

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