On this page, you'll find proposals relating to loan program reform.

H.R.2028/S.942 — Resident Education Deferred Interest (REDI) Act

Sponsor: Rep. Babin [R-TX] 
Sponsor: Sen.Rosen [D-NV]
Introduced: 03/11/2025
NASFAA Summary & Analysis: This bill would provide interest-free deferment on federal student loans for borrowers serving in a medical or dental internship or residency program. During this deferment, no payments would be required, and interest would not accrue. 

H.R.2003 — Affordable Loans for Students Act

Sponsor: Lawler [R-NY]
Introduced: 03/10/2025
NASFAA Summary & Analysis: This bill would lower interest rates on federal student loans to 2%. The bill mandates automatic interest rate modifications for federal loans held by the Department of Education and allows borrowers with federally backed loans held by private lenders to refinance at 2% without extending their repayment terms. It also ensures no origination fees for refinanced loans and requires the Department of Education to report on implementation. The new 2% rate would apply to all new federal student loans issued after enactment.

H.R.1759 — Affordable PLUS Repayment Options for Parents Act of 2025

Sponsor: Rep. Waters, Maxine [D-CA] 
Introduced: 02/27/2025
NASFAA Summary & Analysis: This bill would allow Parent PLUS loan borrowers to repay their loans under income-contingent repayment (ICR) or income-based repayment (IBR) plans, which were previously unavailable to them. The bill removes restrictions preventing Parent PLUS loans and their consolidation loans from qualifying for these repayment options. The changes take effect immediately upon enactment and apply to both current and future Parent PLUS borrowers.

H.R.1739/S.801 — Higher Education Reform and Opportunity Act

Sponsor: Rep. Roy [R-TX]/Sen. Lee [R-UT] 
Introduced: 02/27/2025
NASFAA Summary & Analysis: This bill would eliminate the current federal student loan program and replace it with “federal direct simplification loans”. This would be one loan given to all eligible borrowers, with varying interest rates based on degree program, with interest that begins to accrue when the loan is disbursed. Dependent undergraduate borrowers can borrow up to $7,500 annually, with an aggregate of $30,000; Independent undergraduate students may borrow up to $15,000 annually, with an aggregate of $60,000; and graduate students may borrow up to $18,500 annually, with an aggregate of $74,000. 

S.308 — Graduate Opportunity and Affordable Loans Act

Sponsor: Sen. Tuberville [R-AL] 
Introduced: 01/29/2025 
NASFAA Summary & Analysis: This bill would set new borrowing limits for graduate ($20,500 annually, $65,000 total) and professional students ($40,500 annually, $130,000 total). A phase-out provision allows certain continuing students to borrow under previous limits for the 2025-2026 award year if they received a loan disbursement in 2024-2025 and have not graduated. The Graduate PLUS Loan program will end for graduate and professional students after June 30, 2025, and institutions must notify students of this change within 30 days of enactment. Institutions may also set institutionally-determined loan limits, allowing financial aid administrators to prorate or cap borrowing amounts for all students in a program, as long as policies are applied consistently.

H.R.8461 — Student Loan Reform Act

Sponsor: Rep. Perry [R-PA-10]
Introduced: 05/17/2024
NASFAA Summary & Analysis: This bill would  establish a program for eligible institutions to cosign all new eligible direct loans made to enrolled student borrowers in a given academic year. Participating institutions assume the responsibility to repay the outstanding balance of principal and interest due should the student borrower default on the loan, and/or fail to rehabilitate it after a period of 90 days. This responsibility is terminated upon the date the loan is rehabilitated or fully repaid. Loans consigned by institutions will be subject to an interest rate reduced below the standard rate in accordance with reduced risk posed by the loan, as determined by the Department of Education. Additionally, participating institutions will be regarded with a cohort default rate threshold of 40%, rather than 30%. 

H.R. 7892 — Student Loan Contract Act of 2024

Sponsor: Rep. Underwood [D-IL]
Introduced: 04/09/2024
NASFAA Summary & Analysis: This bill would amend the HEA and would require that master promissory note (MPN) forms for loans made under part D of the HEA be referred to as "student loan contracts" for periods of enrollment starting on or after the enactment date. The student loan contracts are limited to loans made within the same award year. The contracts cannot be applied to loans for periods of enrollment in a different award year. Borrowers would need to enter into a new student loan contract if they borrow a loan in another award year.

H.R. 6951 — College Cost Reduction Act

Sponsor: Rep. Foxx [R-NC]
Introduced: 01/11/2024
NASFAA Summary & Analysis: The original bill established a Pell Plus program, which would have awarded eligible baccalaureate level students at participating institutions an additional Federal Pell Grant (Federal Pell Plus Grant) in an amount equal to their original Pell Grant amount. It would have also replaced the FSEOG and LEAP programs with new Promoting Real Opportunities to Maximize Investments and Savings in Education (PROMISE) grants. PROMISE grants would be awarded to eligible institutions for a six-year period to help the institution carry out activities relating to postsecondary access, affordability, and student success. In mark-ups of the bill, the FSEOG program was restored and the Pell Plus proposal was eliminated. Additionally, the bill would create a standardized financial aid offer, and establish new loan limits and loan repayment plans. It would create a risk-sharing program centered around direct loans and would eliminate many of the recent regulations created during negotiated rulemaking. 

NASFAA Deep Dive Articles:

• Part 1 : Foxx’s College Cost Reduction Act Includes Financial Aid Offer Provisions
• Part 2: Foxx’s College Cost Reduction Act Includes Changes to Pell, Campus-Based Aid, and Loans
• Part 3: Foxx’s College Cost Reduction Act Includes Risk-Sharing Agreements, Transfer Student Support, and Regulatory Overhaul

H.R. 6809 — Parent PLUS Loan Fairness and Responsibility Act of 2023

Sponsor: Rep. Foster [D-IL]
Introduced: 12/14/2023
NASFAA Summary & Analysis: This bill would allow parents who had borrowed a Parent PLUS loan on behalf of their child to transfer the balance of the loan to the student borrower. The transfer requires that the loan be in good standing and that the loan was used to pay for the student’s educational expenses. The student borrower must also be at least 18 years of age, be able to demonstrate the ability to repay the loan, and have in writing the request of the transfer signed by the child, the parent, and the lender. To determine the ability of a child to repay, ED would consider the child’s employment status, income level, credit history, the total dollar amount of the loans to be transferred, and the child’s debt-to-income ratio before and after the transfer. The amount of the transferred loan would not count towards the borrower’s aggregate loan limit.

H.R. 6077 — Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act

Sponsor: Rep. Chu [D-CA]
Introduced: 10/26/2023
NASFAA Summary & Analysis: This bill would restore subsidized loan eligibility for individuals seeking a graduate degree. It would once again make graduate students eligible to receive federal Direct Subsidized Loans, which was ended in 2011 by the Budget Control Act.
NASFAA Supporting Documents: Bill Restoring Subsidized Federal Student Loans for Graduate Borrowers Reintroduced 

H.R.4986/S.2557 — Student Loan Interest Elimination Act

Sponsor: Courtney [Rep.-D-CT] & Welch [Sen.-D-VT]
Introduced: 07/27/2023
NASFAA Summary & Analysis: This bill would eliminate interest on all current federal student loans and would cap interest rates for new federal student loans on or after July 1, 2024 at 4 percent. The interest rates for future borrowers would be determined through a sliding scale that takes into account a student’s financial need. This bill would require that ED create an Education Affordability Trust Fund. All interest paid on such loans would be transferred to this fund to cover the administrative costs of carrying out federal student loan programs. If the revenue transferred to the trust fund exceeds what is needed to cover those administrative costs, ED may choose to use the remaining amount (or a portion of the remaining revenue) for other programs, such as the Pell Grant program or the Postsecondary Student Success Program. 

S.1968 — Graduate Opportunity and Affordability Loans (GOAL) Act

Sponsor: Sen. Tubberville [R-AL]
Introduced: 06/14/2023
NASFAA Summary & Analysis: This bill would limit graduate borrowing through termination of PLUS loans for graduate borrowers, which would be replaced with undergraduate and graduate Stafford loans. The annual unsubsidized Stafford loan limit for graduate borrowers would be $20,500, the same as the current cap, with an aggregate limit of $65,000, which is reduced from the current $138,500. Unsubsidized Stafford loans for professional degrees would be capped at $40,500 annually and $130,000, reduced from the current 138,500 aggregate. The bill would also allow institutions to set lower limits by program. 

H.R.3414 — The Responsible Borrowing Act of 2023

Sponsor: Rep. Grothman [R-WI] 
Introduced: 05/17/2023
NASFAA Summary & Analysis: This bill would amend the HEA to allow higher education institutions, at the discretion of financial aid administrators, to limit the amount of federal loans a student could borrow. The institution would need to demonstrate that student debt levels are excessive for the student’s program of interest. To demonstrate this, the institution would use the most recently available data from the Bureau of Labor Statistics relating to average or median starting salary in the region where the institution is located and recently available data from the College Scorecard relating to the median earnings of students who complete the program. The bill outlines other instances in which an institution could prorate or limit the amount of a federal loan, such as a student’s enrollment status.

• NASFAA Article: NASFAA Endorses Grothman’s Bill to Give Financial Aid Administrators Authority to Limit Student Loan Borrowing

H.R.2981 — Alleviating Intergenerational Debt (AID Act)

Sponsor: Stevens [D-MI]
Introduced: 04/27/2023
NASFAA Summary & Analysis: This bill would amend the HEA and amend the Student Aid Index (SAI) to create a new allowance against income for dependent students’ parents who have student loan debt. The bill puts into place a measure that would require an annual report from the Department of Education highlighting the number and percentage of students who claimed the allowance. The report would also need to highlight the average allowance amount. These numbers would need to be separated into students who did qualify for a Pell Grant and students who did not qualify. 

H.R.2874/S.1292 — Flight Education Access Act

Sponsor: Allred [Rep.-D-TX] & Baldwin [Sen.-D-WI] 
Introduced: 04/26/2023
NASFAA Summary & Analysis: This bill would amend the HEA to increase the federal student loan limits for students in undergraduate flight education and training programs. This bill increases a dependent student’s aggregate borrowing limit for Federal Direct Unsubsidized Stafford Loans to $111,000 and $137,500 for independent students, respectively. It also increases the aggregate borrowing limit of Federal Direct Stafford Loans to $65,000. This bill also puts into place a measure that would require that ED collect annual data on the completion rate (and other metrics outlined in the bill) of each undergraduate flight education and training program. Lastly, this bill would require that the GAO report on the bill’s implementation, the number of eligible programs offered, student demographic data, and provide any feedback to strengthen the program, among other things. 

S.300 — LOAN Act of 2023

Sponsor: Rubio [Sen.-R-FL]
Introduced: 02/07/2023
NASFAA Summary & Analysis: This bill would eliminate interest and replace it with a one-time, non-compounding origination fee that borrowers will pay over the life of the loan. For borrowers who pay off their loans faster than the established repayment plan’s time limit, ED could credit or refund borrowers a calculated amount of the financing fee. The bill would also allow only two repayment plan options, the standard 10-year repayment plan, and an income driven repayment plan, to be created with this bill. Borrowers would automatically be placed in the IDR plan, but can elect to move to the standard repayment plan. 

Legislative Tracker Overview