Chair DeLauro Introduces Legislation to Secure Affordable Student Loans for Every Borrower

Statement

Today, House Appropriations Committee Chair Rosa DeLauro (D-CT-03) introduced the Affordable Loans for Any Student Act of 2022. This comprehensive legislation streamlines existing programs and creates two simple and easy-to-understand options for borrowers to choose from to ensure affordable monthly payments, avoiding loan delinquency or default.

The average college senior who borrows now graduates with nearly $30,000 in debt and total student debt nationwide sits at $1.6 trillion and growing. Many borrowers would benefit from a simple repayment plan based on their income, with a clear light at the end of the tunnel. Currently, however, there are at least five income-based repayment plans and dozens of confusing iterations. As a result, far too many borrowers fail to discover or successfully maintain income-based repayment until it is too late.

"Every young person in America should have the opportunity to get a good education without getting trapped into a lifetime of student loan debt," said Congresswoman Rosa DeLauro. "Young college graduates with good jobs are struggling to make the first big investments in their lives like buying a home or even to purchase necessities and pay rent because of the debt that they hold. For our next generation to fulfill their dreams, contribute to economic innovation and create a prosperous future for themselves and their families, we must simplify the repayment process and make it more affordable for student borrowers. Congress has an obligation to solve this problem, which is why I am proud to introduce the Affordable Loans for Any Student Act with Senators Merkley and Hassan."

"Higher education should create a path to opportunity, not a ball and chain of debt hanging around young Americans' necks," said Senator Jeff Merkley. "I come from a blue-collar family and am a first-generation college graduate. I know firsthand that affordability is a major factor--in fact, often the biggest factor--in whether middle class students are able to obtain the benefits of higher education. Right now, our student debt crisis is holding our whole nation back. Many young Americans are putting off buying houses, starting businesses, or even starting a family because of their student loan burden. This is bad for our communities and terrible for our economy. It's time we had a simple, easy-to-use repayment system that ensured every student has an affordable loan option."

"Student loan debt is burdening young Americans and dragging our economy down with it," said Senator Maggie Hassan. "This commonsense bill will help make it easier for borrowers to make their payments while giving them the freedom to pursue their careers -- whether that is to start their own business or enter into public service. We must take action to help ensure that borrowers are not crushed by the weight of student debt, and this bill is one important step to help do just that."

The Affordable Loans for Any Student Act would overhaul the confusing system of income-based repayment plans to give borrowers a simple choice between two plans:

A Fixed Repayment Plan with equal monthly payments sufficient to repay the loan and any accrued interest over a period of 10 years; or
An Income-Based Repayment (IBR) Plan in which a borrower pays 10 percent of their income above a poverty level, capped at 20 years of payments.
In addition to streamlining repayment plans for borrowers, the bill:

Ends interest capitalization and origination fees on all loans, which can add thousands of dollars to a borrower's total payments over the life of the loan.
Targets assistance to struggling and low-income borrowers.
Allows for automatic recertification of income for IBR plans.
Limits aggressive federal debt collection amounts that are obtained through wage garnishment or tax offset to no more than the amount the borrower would pay under IBR.
Replaces the current deferment and forbearance options into one, streamlined "pause payment" process that does not capitalize interest.
Provides relief to severely delinquent borrowers and those who rehabilitate their loans by automatically enrolling them into the IBR plan.
Changes the use of the confusing term "master promissory note" to "student loan contract" to improve consumer understanding of the purpose of the document.
Improves other loan disclosures and interactive counseling.
The bill is cosponsored in the House by Representatives Jahana Hayes (D-CT-05), and Mary Gay Scanlon (D-PA-05).

The bill is championed in the Senate by Senators Jeff Merkley (D-OR), Maggie Hassan (D-NH), and cosponsored by Catherine Cortez Masto (D-NV), Brian Schatz (D-HI), Ron Wyden (D-OR), Chris Van Hollen (D-MD), Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Ben Cardin (D-MD), and Cory Booker (D-NJ).

The Affordable Loans for Any Student Act of 2022 is officially endorsed by The Institute for College Access and Success (TICAS).

"While completing a college degree remains a strong investment for most, far too many students struggle with student loan repayment," said Sameer Gadkaree, President of The Institute for College Access & Success. "The Affordable Loans for Any Student Act will make repayment more affordable, help prevent default, and simplify repayment options. We applaud Senator Merkley and Chair DeLauro for their leadership on this bill."

The full text of the Affordable Loans for Any Student Act of 2022 legislation is here.

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