By Hugh T. Ferguson, NASFAA Senior Staff Reporter
While President Joe Biden’s student loan debt cancellation plan remains in limbo with the United States Supreme Court, House Democrats are doubling down on their own proposal seeking to address the underlying flaws in the student loan system.
Rep. Bobby Scott (D-Va.), ranking member of the House Committee on Education and the Workforce, on Thursday formally reintroduced the Lowering Obstacles to Achievement Now (LOAN) Act, which was first unveiled in September 2022.
Specifically, the legislation would double the federal Pell Grant by increasing the maximum award over a five-year period to $14,000. The bill would also alter the Public Service Loan Forgiveness (PSLF) program by shortening the time to forgiveness (from 10 to eight years) and codifying the limited PSLF waiver.
“While the President's plan is held up in the Supreme Court, Congress must address the root causes of the debt crisis, including the declining value of the Pell Grant in our flawed student loan system,” Scott said. “That's why we're reintroducing the LOAN Act, to bring down the cost of college for current and future student loan borrowers and their families.”
Rep. Frederica Wilson (D-Fla.), ranking member of the education panel’s subcommittee on Higher Education and Workforce Development, has signed onto the legislation.
In reintroducing the measure Wilson said that she has seen the impact of student loan debt firsthand in her own district where some borrowers in their 50s, 60s, and 70s are still struggling to pay off their loans.
“I also have people in my district who took out Parent PLUS loans. They lost their homes in the process,” Wilson said, adding that one of her staffers nearly lost their home due to a Parent PLUS loan. “This is a generational problem and this is a national crisis.”
Scott, who came out in support of Biden’s debt cancellation program, has argued that this legislation can work in tandem with the administration’s proposed relief and said that the bill would be a first step in overhauling the system regardless of the Supreme Court’s decision.
Publication Date: 3/13/2023
Justin B | 3/20/2023 1:44:40 PM
Most schools that I know of in the public sector have not increased their tuition and fees. The private sector usually does annually because they do not receive state funding to operate, but even with congress looking to increase the pell grant dramatically, I did not see any mention on allowing schools to restrict the loans a student can borrow. The amount a student can borrow should be tailored to the type of institution, program of study, and pace that the student attends (full or part time). We see every day as administrator's students just borrowing because they can, not because they need to and just blowing the money then coming back to the aid office because they want us to help them borrow more. Increase the pell amounts and cut the loan amounts in half across the board.
James C | 3/13/2023 8:28:18 AM
Doubling the Pell grant would go a long way into cutting down loan debt. For the ParentPLUS loan, put in place debt to income ratio requirements. It is unethical for the federal government to lend to parents who do not have the means to pay back the loans.
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