Legislative Tracker: Loan Program Reform

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

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:

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.

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

Publication Date: 4/9/2024

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