The U.S. Senate’s banking committee approved legislation this morning that would require student-loan companies to give prospective borrowers detailed information about the terms and conditions of the private loans they offer.

The bill, which was approved by a voice vote following minimal debate, would require lenders to provide borrowers with “clear and conspicuous” disclosures about interest rates, terms, fees, and deferral options, among other things. It would also require lenders to notify borrowers of their eligibility for lower-cost federally guaranteed loans, and would bar companies from “co-branding” their loans with an institution’s mascot, logo, or colors.

The legislation is a response to concerns raised by student groups and the New York attorney general, Andrew M. Cuomo, at a banking-committee hearing in June. At the hearing, Mr. Cuomo accused private lenders of charging higher interest rates to students attending proprietary colleges and historically black colleges, where default rates tend to be higher than the national average.

Under the bill, the U.S. comptroller general would be required to study whether lenders’ consideration of such “nonindividual factors” as institutional default rates in underwriting helps or harms borrowers.

Student groups have praised the legislation. “This bill will end abusive practices by lenders such as co-branding and kickbacks, and provide borrowers with more clear information about the rates and terms of private loans,” said Luke Swarthout, a higher-education advocate for the U.S. Public Interest Research Group. “Providing more clarity about interest rates and potential fees upfront to borrowers is critical because a significant number of borrowers turn to private loans before exhausting their capacity to borrow more-affordable federal student loans.” —Kelly Field