Home Loans Congress: Pay Off Student Loans This Way
Congress is trying to make college more affordable.
Here’s what you need to know.
College Affordability Act
The College Affordability Act, new legislation which was introduced by House Democrats Tuesday and would update the Higher Education Act of 1965, offers a simple promise: combat the rising cost of tuition and increase federal student aid so that every student can afford to attend college and earn a quality degree. The College Affordability Act, which is expected to cost $400 billion over 10 years, seeks to reshape higher education in several ways:
Makes Community Colleges Tuition-Free
Through federal-state partnerships, tuition would be reduced at public colleges and universities. Federal funding would be allocated to states that make community college tuition-free and that continue to invest in public colleges and universities. The legislation also would increase Pell Grants to help cover tuition and room and board, among other expenses. High school students also could earn free college credit while still in high school, which would lower their overall college tuition costs and limit student loan borrowing.
Makes Student Loans More Affordable and Practical
The College Affordability Act also revamps student loans in several ways.
Eliminates origination fees
When you borrow student loans, the federal government charges you an origination fee. Under the College Affordability Act, this origination fee would be eliminated.
Simplifies Student Loan Repayment
Today, the latest student loan debt statistics show that there are more than 44 million borrowers who collectively owe $1.6 trillion of student loan debt. If you have federal student loans, there are many, and often confusing, income-driven repayment plans. Each have different requirements, which may be complicated for student loan borrowers to follow.
The College Affordability Act replaces the current student loan repayment plans with two plans: one fixed student loan repayment plan and one income-based repayment plan. Borrowers also could automatically re-certify their income each year, which would save time from the current task of completing annual paperwork.