# Plain Language Summary: Combating Excessive Student Debt Act of 2022

This bill would stop the federal government from making new PLUS loans starting July 1, 2023. PLUS loans are a type of federal student loan that parents can take out to help pay for their children's college education, or that graduate students can take out for themselves. Currently, there's no limit on how much someone can borrow through PLUS loans—they can borrow the full cost of attendance at a school. This bill would eliminate that option entirely for new borrowers after the cutoff date.

There's a transition period built in for students already in the pipeline. If you haven't gotten a PLUS loan yet but receive one between now and July 1, 2023, you can continue borrowing through PLUS loans until you finish your degree or June 30, 2027, whichever comes first. This gives current students a grace period to complete their education under the old system.

The bill also requires colleges and universities to gradually reduce how much money they can make from PLUS loans. Schools often benefit financially when students take out these loans because they receive the funds directly. Starting in 2023-2024, schools can't earn more from PLUS loans than their average from the previous five years. That cap then drops to 75 percent the following year, 50 percent the year after that, and finally 25 percent by 2026-2027. This is designed to discourage schools from pushing students toward expensive PLUS loans as a way to fund their operations.

The core idea behind this bill is that PLUS loans have become a way for schools to increase tuition costs without limit, since borrowers can take out unlimited amounts. By eliminating new PLUS loans and reducing schools' financial incentive to promote them, the bill aims to make college more affordable and prevent students from taking on excessive debt.

Combating Excessive Student Debt Act of 2022

Rice, Tom

Combating Excessive Student Debt Act of 2022 This bill generally prohibits new Federal Direct PLUS Loans from being made to student loan borrowers on or after July 1, 2023. Additionally, the bill limits the percentage of institutional revenue that may be derived from these loans.