“To amend the Higher Education Act of 1965 to provide a student loan allowance calculation for purposes of determining the student aid index.”
No CRS summary available for this bill.
This section amends the Higher Education Act of 1965 to include, effective award year 2027–2028, a student loan allowance as a subtraction in computing parents' available income for the student aid index (SAI) used to determine eligibility for need-based federal student aid such as Pell Grants. The allowance equals the lesser of $4,000 or 15% of a single parent's or married parents' combined outstanding federal student loan debt (i.e., principal, interest, and fees owed under title IV), but is unavailable if adjusted gross income exceeds $200,000 (single parent) or $400,000 (married parents). It further directs the Department of Education to adjust the $4,000 amount and income thresholds annually for inflation (using CPI increase from April 2022) beginning award year 2028–2029, rounded to the nearest $10. (Thus, the allowance lowers SAI and increases aid eligibility for dependent students whose parents hold federal student loans.)
This section directs the Secretary of Education to submit to Congress, not later than July 1, 2028, and annually thereafter, a report on the impacts of the amendments made by this Act for the most recent award year with available data. The report must include (1) the number and percentage of dependent students whose student aid index (SAI) computations under section 475(a) of the Higher Education Act of 1965 include the subtraction of a student loan allowance (as added by section 2 under section 475(c)(5)) from parents' total income, disaggregated by Pell Grant-eligible students under section 401 of such Act (20 U.S.C. 1070a) and those not eligible; and (2) the average amount of such student loan allowance.