Higher Ed Leaders Reintroduce LOAN Act to Lower Cost of College
Bill would lower cost of college for current and future student borrowers and their families
WASHINGTON – Today, Education and the Workforce Committee Ranking Member Robert C. “Bobby” Scott (VA-03), Higher Education and Workforce Development (HEWD) Subcommittee Ranking Member Frederica Wilson (FL-24), and the other Democratic Members of the HEWD Subcommittee unveiled plans to reintroduce the Lowering Obstacles to Achievement Now (LOAN) Act. The LOAN Act would lower the cost of college for current and future student borrowers and their families.
The LOAN Act would build on President Biden’s plan to forgive up to $20,000 in outstanding federal student loan debt for millions of borrowers. While this plan would provide urgent relief for Americans who currently hold student loans, Congress must address the root causes of the student debt crisis, including the declining value of the Pell Grant and our flawed student loan system.
“The LOAN Act is the next step we must take to confront the student debt crisis. This legislation would lower the cost of college for students and families by doubling the Pell Grant, improving the Public Service Loan Forgiveness program, lowering interest rates, and making other critical reforms to streamline our student loan system,” said Ranking Member Scott. “By making loans cheaper to take out and easier to pay off, the LOAN Act will help improve the lives of student loan borrowers—both now and in the future.”
"We’ve long touted a college degree as a ticket to the American Dream. Today, that dream is further out of reach due to crippling student debt. Student debt is preventing millions of hardworking Americans from starting a family, purchasing a home, and saving for retirement. The LOAN Act ensures that this generation is the last to experience America’s student loan debt crisis. By bringing together some of the most forward-thinking and innovative proposals, the LOAN Act reforms the current system and lowers the cost of college for all borrowers,” said HEWD Subcommittee Ranking Member Wilson.
The cost of attending college today is more than triple what it cost to attend college in 1980. Student loans often follow borrowers long after college and can prevent them from planning for important life events, such as buying a house or having a child. The burden falls particularly hard on women and people of color, who take on disproportionally larger amounts of debt and are less likely to be able to pay off the debt throughout the course of their careers.
The LOAN Act would lower the cost of college for current and future student borrowers and their families. The legislation would:
- Double the federal Pell Grant by increasing the maximum award over 5 years to $14,000, building on the $500 increase in the 2022 Consolidated Appropriations Act;
- Improve the Public Service Loan Forgiveness program by shortening the time to forgiveness and broadly codifying the current PSLF waiver;
- Make loans less expensive by expanding access to subsidized loans, eliminating capitalization of interest including after forbearance and deferment, and creating a safety net for vulnerable borrowers; and
- Lower interest rates by tying interest rates for all new Federal student loans to the ten-year Treasury note—but ensuring that no new loan has an interest rate higher than five percent—and allowing both federal and private borrowers to take advantage of these lower rates.
In addition to Ranking Member Scott and HEWD Subcommittee Ranking Member Wilson, the legislation was will be introduced with Rep. Mark Takano (CA-39), Rep. Raúl Grijalva (AZ-07), Rep. Alma Adams (NC-12), Rep. Lucy McBath (GA-07), Rep. Joe Courtney (CT-02), Rep. Suzanne Bonamici (OR-01), and Rep. Gregorio Kilili Camacho Sablan (NMI-At Large).
For the bill text of the LOAN Act, click here.
To read the fact sheet for the LOAN Act, click here.
To read the title-by-title for the LOAN Act, click here.
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