Signed by President George Bush

Vote Smart's Synopsis:

Vote to pass a bill that increases limits for student loans, changes repayment requirements for parents, and temporarily allows the government to purchase loans from certain lenders.

Highlights:

• Increases the loan limit above the determined financial need for eligible students in the following ways (Sec. 2):
• Increases the limit for graduate students enrolled in an eligible institution from $10,000 to $12,000;
• Allows a limit of up to $2,000 for dependent undergraduate students; and
• Increases the limit amounts for independent undergraduate students from $4,000 to $6,000 for the first two years of study and from $5,000 to $7,000 for the second two years of study (Sec. 2).

• Increases the total federal loan limit for undergraduate studies from $23,000 to $31,000 for dependent students and from $46,000 to $57,500 for independent students (Sec. 2).

• Allows a six-month grace period after a student has less than half of a full time class load before parent borrowers must start making payments (Sec. 3).

• Authorizes the Secretary of Education and the Secretary of the Treasury to purchase loans originated on or after October 1, 2003 from eligible lenders if there is an inadequate availability of loan capital to meet the demand for student loans, with a temporary authority that expires on July 1, 2009 (Sec. 7).

Full Bill Text

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that changes the limits for student loans, changes repayment requirements for parents, and temporarily allows the government to purchase loans from certain lenders.

Highlights:

• Increases loan limits above the determined financial need for eligible students in the following ways (Sec. 2):
• Increases the limit for graduate students enrolled in an eligible institution from $10,000 to $12,000;
• Allows a limit of up to $2,000 for dependent undergraduate students; and
• Increases the limit amounts for independent undergraduate students from $4,000 to $6,000 for the first two years of study and from $5,000 to $7,000 for the second two years of study.

• Sets the total loan limit for undergraduate studies at $31,000 for dependent students and $57,500 for independent students (Sec. 2).

• Allows a six month grace period after a student has less than half of a full time class load before parent borrowers must start making payments (Sec. 3).

• Authorizes the Secretary of Education and the Secretary of the Treasury to purchase loans originated on or after October 1, 2003 from eligible lenders if there is an inadequate availability of loan capital to meet the demand for student loans, with a temporary authority that expires on July 1, 2009 (Sec. 7).

Full Bill Text

Full Bill Text