Ranking Member Scott Introduces Bill to Lower Cost of College

As originally released by the Committee on Education and Workforce, Democrats.

WASHINGTON, D.C. – Today, Education and Workforce Committee Ranking Member Robert C. “Bobby” Scott (VA-03) introduced 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 cost of attending college today is 40 times higher than tuition in 1963.  Student loans often follow borrowers long after college and can prevent them from planning for important life events, such as buying a house or starting a family. 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 will help 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 fix 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.”

TheLOAN Act would lower the cost of college for current and future student borrowers and their families.  Specifically, the legislation would:

• Double the federal Pell Grant by increasing the maximum award over 5 years to $14,000;
• 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;
• Offers borrowers affordable monthly payments by codifying a new income driven repayment plan which include the major provisions from the Saving on a Valuable Education (SAVE) plan;
• Streamline Loan Repayment by offering borrowers two repayment plans while allowing borrowers with old loans flexibility; and
• Lowerinterest 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.

For the bill text of the LOAN Act, click here.

To read the fact sheet for the LOAN Act, clickhere.

To read the title-by-title for the LOAN Act,click here.

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