Federal Student Debt Relief Reform Act

To reform federal student loan repayment and forgiveness programs, and for other purposes.

Example/Problem Description

SECTION 2. FINDINGS. Congress finds the following: Student loan debt in the United States exceeds $1 trillion. High student debt burdens delay home ownership, family formation, and workforce mobility. Existing repayment programs are overly complex and difficult for borrowers to navigate. Public service workers often face barriers accessing loan forgiveness programs. Greater transparency regarding college costs and employment outcomes is necessary to protect students.

Bill Impact

SECTION 3. SIMPLIFIED INCOME-DRIVEN REPAYMENT PLAN. (a) ESTABLISHMENT.— The Secretary of Education shall create a single federal income-driven repayment plan for all eligible federal student loan borrowers. (b) PAYMENT CAP.— Monthly payments under such plan shall not exceed 5 percent of discretionary income. (c) AUTOMATIC ENROLLMENT.— Borrowers more than 60 days delinquent shall be automatically enrolled in the income-driven repayment plan if eligible.

Solutions

SECTION 4. PUBLIC SERVICE LOAN FORGIVENESS REFORM. (a) ELIGIBILITY EXPANSION.— Eligible public service employment shall include— public education; emergency medical services; nonprofit organizations; public defenders; rural healthcare providers. (b) AUTOMATIC CREDIT TRACKING.— The Department of Education shall establish an automatic payment tracking system for qualifying borrowers. (c) PROCESSING DEADLINE.— Applications for forgiveness shall be processed within 90 days.

Possible Support

SECTION 5. INTEREST RELIEF. (a) INTEREST FREEZE.— No federal student loan shall accrue interest while a borrower remains enrolled in an income-driven repayment plan. (b) RETROACTIVE INTEREST RELIEF.— Borrowers who have repaid amounts exceeding the original principal balance may receive interest reduction credits determined by the Secretary.

Possible Opposition

Opponents Would Say Expensive for taxpayers. Could encourage colleges to raise tuition. May be unfair to people who already repaid loans. Expands federal involvement in higher education.

Arguments In Support

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Arguments In Opposition

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Why This Is Not A Shield For Criminals

Budget Impact

Section(s) Impacted

Legislative Lanaguge

House of Reps