Know Before You Owe Federal Student Loan Act of 2023

This bill requires colleges and universities to provide pre-loan counseling to students before they accept federal student loans, including an estimate of monthly payments compared to expected income (after taxes, living expenses, and health insurance) based on their program's starting wages and total debt. It mandates that institutions verify students manually enter the exact loan amount they wish to borrow, while also providing warnings about high debt-to-income ratios and options to reduce borrowing through scholarships or timely graduation. Additionally, lenders must send quarterly statements during non-repayment periods (like while in school) showing loan balances, interest rates, total interest paid, and how paying interest during these times can lower long-term costs. The bill updates existing requirements to replace "entrance counseling" with "pre-loan counseling" throughout the Higher Education Act. These changes directly affect federal student loan borrowers, colleges, and lenders by improving transparency before and during loan repayment.