Rep. Peter DeFazio Introduces HIGHER ED Act to Make College More Affordable
This week Rep. Peter DeFazio introduced the Helping Improve Grants for Higher Education & Repayment of Expensive Debt (HIGHER ED) Act, a bill that will make college more affordable for students nationwide.
The major feature of the bill would help borrowers repay their student loans by raising the minimum annual salary required before they have to begin to pay back their loans under income-driven repayment plans.
Currently, former students enrolled in income-driven loan repayment plans are generally required to start making payments on their loans upon earning a salary of at least $17,655 annually, or 150 percent of the federal poverty level. Under Rep. DeFazio’s legislation, the minimum salary would be raised to $26,482.50—225 percent of the federal poverty level.
Additionally, under current programs interest on applicable loans begins to accrue when the loan enters repayment even if the borrower’s payment is $0. Under Rep. DeFazio’s bill, borrowers will not be charged interest from the time they graduate until they begin earning the minimum annual salary.
“A college education should open doors for our nation’s young people—not weigh them down with crippling debt,” said Rep. Peter DeFazio. “My legislation will ensure that recent graduates can focus on finding jobs and starting their careers without the added pressure of sky-high monthly loan payments and rapidly-accruing interest.”
In addition, the bill includes a number of provisions to ease the financial burden of student loans, including:
- The re-institution of year-round Pell Grants, enabling students to finish their education faster. Year-round Pell Grants ended in 2011. The bill also raises the maximum Pell Grant to $9,410, the national average cost of in-state tuition for the 2015-2016 school year, and indexes the grant to inflation moving forward, retaining the Pell Grant’s purchasing power.
- The re-institution of graduate student eligibility for subsidized loans, which was removed during the Republican budget cuts of 2013. This would give graduate students access to federal loans which do not accrue interest while they are in school.
- A provision that allows former students to refinance their student loans during the 2016-2017 school year at current historic low interest rates , and discharge student loan debt in bankruptcy. Currently, if an individual files for bankruptcy, student loan debt is the only debt that is unable to be discharged.
- A provision providing eligibility for substitute teachers at higher education institutions to access public service loan forgiveness.
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