The purpose of the Know Before You Owe Federal Student Loan Act of 2025 is to improve the counseling process for students taking out federal student loans. This legislation aims to ensure that borrowers have a clearer understanding of their loan amounts, repayment obligations, and the financial implications of their borrowing decisions. Key provisions of the act include several important changes to the pre-loan counseling requirements. First, it requires that students receive counseling before taking out any new loans, not just the first loan.