U.S. Senators Bill Cassidy and Lisa Murkowski introduced the State-Based Education Loan Awareness Act on Mar. 18 to help students access more affordable higher education financing. The bill aims to make it easier for colleges and universities to inform students about financial aid opportunities from non-profit, state agency lenders, which may offer better terms and lower interest rates than other private loans.
The legislation is intended to address concerns about student debt by connecting families with low-cost loan options provided by state agencies. "Students should be able to pay for college without taking on insurmountable debt," said Dr. Cassidy. "This legislation connects families with low-cost student loan options to ensure they don’t have to pay a dollar more than they need to." The bill has support from organizations such as the Education Finance Council, the Alaska Commission on Postsecondary Education, and the Louisiana Public Facilities Authority.
Senators Jack Reed and Jeanne Shaheen also cosponsored the bill. According to background information provided in the announcement, changes made during the last reauthorization of the Higher Education Act in 2008 prevented institutions from steering students toward private lenders through preferred lender lists but also limited families' awareness of state agency loan options by classifying them as private lenders.
The proposed act would allow institutions of higher education to share information about state agency loans if certain conditions are met, including that these loans are authorized under state law and offer terms at least as favorable as federal Direct PLUS Loans. Institutions must also advise borrowers to exhaust all federal education loans first and inform them about federal loan benefits such as income-driven repayment plans, forgiveness opportunities, deferment options, interest subsidies, and tax advantages.
The Senate Health, Education, Labor, and Pensions Committee works on public health, education, workforce issues and retirement programs with a focus on protecting health and supporting worker rights according to the official website. In the 119th Congress, Cassidy served as chair of this committee according to the official website. The committee influences federal regulations affecting health and education across the United States according to the official website, provides oversight of federal laws and agencies in health and labor according to the official website, and oversees agencies like the Food and Drug Administration (FDA) and National Institutes of Health (NIH) according to the official website.
Looking ahead, supporters say that expanding access to information about state-based student loans could help reduce borrowing costs for many families seeking higher education.
