Chairman Cassidy, Colleagues Introduces Bill to Make Higher Education More Affordable

WASHINGTON - U.S. Senators Bill Cassidy, M.D. (R-LA), Chairman of the U.S. Senate Health, Education, Labor, and Pensions Committee, and Lisa Murkowski (R-AK) introduced the State-Based Education Loan Awareness Act to help young people afford higher education. The legislation makes it easier for higher education institutions to inform students of financial aid opportunities offered by non-profit, state agency lenders, which often offer better terms and lower interest rates.

"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."

This legislation is supported by the Education Finance Council, the Alaska Commission on Postsecondary Education, and the Louisiana Public Facilities Authority.

U.S. Senators Jack Reed (D-RI) and Jeanne Shaheen (D-NH) also cosponsored the bill.

Background

When the Higher Education Act (HEA) was last reauthorized in 2008, new provisions were included to prevent institutions of higher education (IHE) from steering students toward private lenders through the use of "preferred lender lists" in exchange for benefits to the institution. While this helped put an end to a system that benefited lenders and institutions over students, state agency lenders were included in the definition of "private lender," which prevented families from learning about all the low-cost student loan options available to them.

The State-Based Education Loan Awareness Act would allow IHEs to inform families about state agency loan options if:

• The loans are authorized, established, or chartered under State law or otherwise approved by the State;
• The state agency lender offers one or more loans with interest rates and fees that are at least as favorable as those of the federal Direct PLUS Loan;
• The information is made available only to borrowers who have been advised by the IHE:
• • That they should exhaust all federal education loans before accepting a state agency lender's loan; and
  • Of the interest rates, fees, and benefits of federal education loans, including income-driven repayment options, opportunities for loan forgiveness, forbearance and deferment options, interest subsidies, and tax benefits.

###

For all news and updates from HELP Republicans, visit our website or Twitterat @GOPHELP