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Responsible Student Loan Solutions Act

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5/9/2013--Introduced. Responsible Student Loan Solutions Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to limit the unpaid amount of Direct Stafford loans that students may amass before completing their undergraduate ...[more]

Sponsor

  • Rep. John F. Tierney [D, MA-6]

Cosponsors (14)

  • Robert E. Andrews
  • Rep. Timothy H. Bishop [D, NY-1]
  • Rep. David N. Cicilline [D, RI-1]
  • Rep. Joe Courtney [D, CT-2]
  • Rep. Susan A. Davis [D, CA-53]
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Sponsor: Rep John Tierney (D-MA)

Summary:

  • Would limit the unpaid amount of Direct Stafford loans that students may amass before completing their undergraduate education  on the basis of whether a student is a dependent student, independent student, or dependent student whose parents are unable to borrow a Direct PLUS loan.
  • Would limit the amount of Direct Stafford loans that students may borrow in any academic year before the completion of their undergraduate studies. That limit would vary on the basis of whether a student: (1) is a dependent student, independent student, or dependent student whose parents are unable to borrow a Direct PLUS loan; and (2) has or has not successfully completed the first year or first and second years of their undergraduate studies.
  • Would set the annual interest rate on Direct loans at the bond equivalent rate on 91-day Treasury bills plus a percentage that: (1) represents the total cost of administering the Direct Loan program and borrower benefits, and (2) results in the program being revenue neutral for the applicable 12-month period. Allows the Secretary of Education to use different percentages under that formula for the Direct Stafford Loan, Unsubsidized Stafford Loan, PLUS Loan, and Consolidation Loan programs.
  • Would cap the annual interest rate for Direct Stafford loans at 6.8%, and for Direct Unsubsidized Stafford loans and Direct PLUS and Consolidation loans at 8.25%
  • Would direct SecEd to charge the borrower of a Direct PLUS loan an origination fee of up to 3% of the loan principal.
 
Talking Points:
 
  • Limits student borrowing based upon dependency status and matriculation. 
 
Status:
 

5/9/13 – Introduced and referred to the Ed and Workforce Cmte.

7/8/13 – Referred to Subcommittee on Higher Ed and Workforce Training.