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 loans. 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 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 measure. According to background information in the announcement, changes made during the last reauthorization of the Higher Education Act in 2008 restricted institutions from steering students toward private lenders through preferred lender lists but also limited information about state agency loans available to families.
The proposed act would allow institutions of higher education to share details about state agency loan programs if certain conditions are met, such as ensuring that these loans are authorized under state law and offer terms at least as favorable as federal Direct PLUS Loans. Additionally, schools must advise borrowers first about exhausting federal loan options and inform them of all relevant benefits associated with federal education loans.
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.
Supporters say that increasing awareness of state-based lending could help reduce overall student borrowing costs while maintaining protections for borrowers. The future steps for this legislation will depend on further consideration by Congress.
