What People Are Saying: Lowering Obstacles to Achievement Now (LOAN) Act
WASHINGTON — On September 15, 2022, Education and Labor Committee Chairman Bobby Scott (VA-03) and Higher Education and Workforce Investments Subcommittee Chair Frederica Wilson (FL-24) introduced the Lowering Obstacles to Achievement Now (LOAN) Act to lower the cost of college for current and future student borrowers and their families. Specifically, the new legislation doubles the Pell Grant, improves the Public Service Loan Forgiveness program, and makes loans more affordable and accessible.
Here is what leading higher education experts and advocates are saying about the LOAN Act:
AccessLex: "AccessLex Institute is pleased to offer its support for the Lowering Obstacles to Achievement Now (LOAN) Act, which would improve the Public Service Loan Forgiveness (PSLF) program, increase the value of higher education for graduate and professional students and make federal student loans less expensive.
"PSLF is a vital recruitment tool encouraging the best and brightest to serve millions of Americans through public service careers that benefit communities across this country. However, despite its benefits, complex program rules and implementation challenges have caused serious issues for borrowers seeking forgiveness. The LOAN Act would simplify PSLF and improve applicant success rates by reducing the number of years required in a public service job. It would also count payments made on loans prior to consolidation and certain forbearances and deferments as qualifying payments and eliminate the requirement that borrowers be employed in a public service job at the time of forgiveness. Simplifying PSLF in this way would incentivize more Americans to pursue careers as public servants.
"For graduate and professional students, borrowing for higher education has never been more expensive. Under current law, students are prohibited from using Pell Grants to finance their graduate education. In addition, the Budget Control Act of 2011 eliminated Direct Subsidized Loans for graduate students, which means that graduate loans accrue interest while borrowers are in school. AccessLex applauds the LOAN Act provisions that would allow graduate and professional students to exhaust their remaining Pell Grant funds to finance their graduate education and once again provide them with access to subsidized loans. These provisions will help to decrease loan balances by thousands of dollars, while increasing both the access to and the value of advanced education.
"In addition to the growing cost of higher education, loan balances can balloon due to high interest rates, origination fees and interest capitalization. By eliminating interest capitalization and origination fees and ensuring that new loans will not have an interest rate higher than five percent, the LOAN Act will help reduce costs for students and decrease debt over time."
The American Psychological Association:
“The American Psychological Association applauds Chairman Scott and Chairwoman Wilson for their leadership in introducing the LOAN Act, which recognizes the need to provide more affordable and accessible pathways to higher education. The legislation would make necessary and common-sense reforms to federal student loan programs, and help grow and diversify both student populations at colleges and universities, as well as our workforce, including in mental health fields, where the need for diverse, culturally competent professionals continues to grow.”
Center for American Progress:
“Each year, the federal government makes billions of dollars available in student loans, putting millions of borrowers into a broken system, and leaving many to fall through the cracks," said Jared Bass, Senior Director for Higher Education at the Center for American Progress. This legislation takes meaningful steps towards addressing many of the ills of that system, and will provide and advance educational and economic opportunities for more students, their families, and their communities.”
Council of Graduate Schools:
“This legislation highlights a commitment to making graduate education more affordable by maximizing the Pell Grant program. This ensures that individuals with exceptional financial need can meet changing workforce needs and pursue degrees essential to their career goals.”
“The Lowering Obstacles to Achievement Now Act, or LOAN Act, is a comprehensive approach that would help address barriers to accessibility and affordability for students pursuing higher education. In particular, the Education Trust is pleased to see the inclusion of key provisions within the bill that would make our higher education system more equitable for underserved students, such as doubling the maximum Pell Grant award and expanding access to DREAMERS, as well as important provisions that would make it easier and more affordable for students to repay their loans. We are pleased to support this important legislation, and thank the Chair and the Chairwoman for their steadfast commitment to our nation’s students.”
"We are encouraged by Chairman Scott and Chairwoman Wilson's efforts to reduce continuing student loan debt in the Lowering Obstacles to Achievement Now Act
(LOAN Act). The emphasis on alleviating obstacles for students from various backgrounds, including first generation college attendees, is admirable. The NAACP supports continued movement in ways to provide additional relief and by means of other legislative vehicles to make postsecondary education more attainable.”
New America Higher Education:
“The LOAN Act is an important step forward on many fronts, especially in terms of providing an automatic pathway to affordable payments for struggling borrowers and ensuring that interest doesn't capitalize on their loans.”
Student debt burdens have skyrocketed since Congress last reauthorized the Higher Education Act
in 2008, soaring 280% and trapping millions of Americans in debt that they will never be able to repay. We applaud Chairman Scott and Chairwoman Wilson’s proposals to reduce student debt burdens by reducing the need to borrow through critical improvements to the Pell Grant program, including doubling the maximum grant amount and expanding access to DREAMers, and cutting unfair extra borrowing costs, such as loan origination fees, excessive interest charges, and interest capitalization. We look forward to working with them and other members of Congress to build on this proposal with an eye toward making college accessible to low-income students without mountains of debt; redesigning income-based repayment to ensure all borrowers are able to make real progress toward being debt-free; and rethinking the punitive approach to default that traps millions of borrowers in poverty.”
“This proposal takes major strides to improve college affordability and streamline the student loan repayment system to better meet the needs of borrowers. Doubling the Pell Grant will help restore the power of Pell to put higher education within reach for more students, and much-needed reforms to prevent student loan balances from growing over time will result in a system that is more generous and easier to navigate for struggling borrowers. We applaud Chairman Scott and Congresswoman Wilson for putting students and borrowers first and addressing several of their most pressing concerns in this legislation.”
Democratic Press Office, 202-226-0853