Know Before You Owe Private Student Loan Act of 2012

Know Before You Owe Private Student Loan Act of 2012 - Amends the Truth in Lending Act to require a lender, before issuing a private education loan for a student attending an institution of higher education (IHE), to obtain the IHE's certification of: (1) the student's enrollment status, (2) the student's cost of attendance, and (3) the difference between that cost and the student's estimated financial assistance. Eliminates the requirement that such lenders obtain a self-certification form from the private education loan applicant.

Allows a lender to issue such loan without a certification if there is no response from the relevant IHE within 15 business days of the lender's request for the certification.

Requires private educational lenders to: (1) send loan statements to borrowers at least once every three months a student is enrolled at an IHE; (2) notify the relevant IHE, in writing, of the loan amount and the student to whom it applies no later than the date funds are issued; and (3) submit an annual report to the Consumer Financial Protection Bureau (CFPB) containing information the CFPB requires concerning private student loans.

Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require IHEs, before providing lenders with certifications, to determine whether students have exhausted their options for title IV assistance and notify borrowers of: (1) the availability of such assistance; (2) their ability to choose their own private educational lender; (3) the impact of the proposed private education loan on their eligibility for other financial assistance; and (4) their right to accept or reject a private education loan within 30 days of the lender's approval of their application, and to cancel the loan within 3 business days of its consummation.