# Plain Language Summary of the LOAN Act

This bill makes major changes to federal student aid programs, with the biggest impact being a significant increase in Pell Grants—the main federal financial aid available to low-income college students. Starting in the 2024-2025 school year, the maximum Pell Grant would gradually increase from its current level to $13,000 by 2029-2030, then continue growing with inflation. This means students from lower-income families would have more money available to pay for college without taking out loans. The bill also makes this funding permanent rather than requiring Congress to approve it each year, which provides more stability and predictability for students planning their education.

Beyond Pell Grants, the bill tackles several other student loan problems. It eliminates origination fees that are currently charged when students take out federal loans, saving borrowers money. It also stops "interest capitalization"—a practice where unpaid interest gets added to the loan balance, causing students to owe interest on interest. The bill makes federal student loans more affordable by reducing interest rates and creates automatic enrollment in income-based repayment plans for struggling borrowers, so people don't have to navigate complicated paperwork to get relief. For those working in public service jobs like teaching or government work, the bill improves the Public Service Loan Forgiveness program, making it easier to qualify for loan forgiveness after ten years of service.

The bill also expands who can receive federal aid. It allows undocumented immigrants (often called "Dreamers") to access federal student loans and grants, and it provides extra Pell Grant money to students whose families receive government benefits like food assistance or Medicaid. Additionally, graduate students would become eligible for subsidized loans where the government pays the interest while they're in school, and teachers would get expanded loan forgiveness options. Overall, this bill is designed to make college more affordable and reduce the burden of student debt for millions of Americans.

LOAN Act

Wilson, Frederica S.

Lowering Obstacles to Achievement Now Act or the LOAN Act This bill makes various changes to federal student aid programs, including by providing funding to increase the maximum Pell Grant award for each eligible student and reducing the number of monthly loan payments required for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.