Bill Overview
Title: Affordable Loans for Any Student Act
Description: This bill addresses repayment options, loan disclosures, and loan counseling for student loans. The bill revises requirements concerning repayment options for student loan borrowers. For instance, the bill terminates interest capitalization and origination fees for Federal Direct Loans, provides assistance to low-income borrowers or borrowers who are delinquent on loan payments, and replaces the existing income-based repayment plans with two new plans. Under the new plans, borrowers may choose (1) a fixed repayment plan with equal monthly payments paid over a period of 10 years, or (2) an income-based repayment plan with monthly payments equal to 10% percent of their income above the poverty level. The income-based plan is capped at 20 years of payments. The bill also revises requirements concerning student loan disclosures and student loan counseling for borrowers. For instance, the bill requires the Department of Education to maintain online counseling tools that provide borrowers with entrance and exit student loan counseling.
Sponsors: Rep. DeLauro, Rosa L. [D-CT-3]
Target Audience
Population: People with student loans
Estimated Size: 43000000
- The global population of student loan borrowers includes anyone currently in higher education who takes out a loan, as well as those who have already taken loans and are in the repayment phase.
- The bill impacts both current students and those who have already graduated or left school who are still repaying loans.
- According to the World Bank, there are millions of students worldwide in higher education, a significant portion of whom may be reliant on student loans.
- While the exact global number of student loan borrowers is not readily available, it's likely in the tens of millions based on global higher education enrollment figures.
Reasoning
- The proposed policy aims to provide relief to a large segment of the US population with federal student loans, which numbers about 43 million. However, not all borrowers will be equally affected. The emphasis on aiding low-income borrowers and those delinquent on loans will primarily bring relief to the most financially unstable segments of this population.
- The policy's budget limitation means assistance will likely prioritize those with the greatest need, potentially leaving those with moderate incomes or repayments under better control with reduced benefits.
- The wellbeing assessments will focus on how the policy plans influence the financial and emotional stress associated with student loan debt, with a particular focus on long-term stability given the 20-year cap on the income-based repayment plan.
Simulated Interviews
Recent college graduate (Chicago, IL)
Age: 24 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I feel constantly stressed about my student loans. The interest seems to grow faster than I can pay it off. An income-based repayment plan would really help me manage monthly expenses and still make progress on my loan.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 6 |
Mid-level IT professional (Austin, TX)
Age: 32 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Ending interest capitalization would have helped me a lot in previous years, but it's less impactful for me now. However, better repayment plans would provide peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 8 |
Freelance designer (San Francisco, CA)
Age: 29 | Gender: other
Wellbeing Before Policy: 3
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- It's hard to plan for future loan payments without stable income. Having a repayment plan tied to my income would really make a huge positive difference.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 7 | 3 |
| Year 5 | 7 | 4 |
| Year 10 | 8 | 5 |
| Year 20 | 9 | 6 |
Nursing student (Miami, FL)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- As a current student, these changes will affect how I think about loans after graduation. Making informed decisions about future payments will be easier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Public school teacher (Portland, OR)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- The fixed repayment plan would suit my expected stable income better, but I appreciate knowing the income-based plan is there if I need it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Stay-at-home parent (Boston, MA)
Age: 38 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- Having the income-based repayment option when I re-enter the workforce would mean I can manage payments without sacrificing family needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 7 |
Entrepreneur (New York, NY)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- I'm not sure how much this change will impact me, given my sporadic income, but reducing interest would have made past payments easier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
College student (Phoenix, AZ)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- Having clear guidance through counseling tools will help me manage and plan my student finances better. The structure seems encouraging.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Retired engineer (Seattle, WA)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- It's been tough balancing loan payments on a fixed income. An income-based repayment would certainly ease some of the financial strains in retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 8 |
Factory worker (Detroit, MI)
Age: 35 | Gender: male
Wellbeing Before Policy: 2
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- I'm barely scraping by, so any break on loan payments would help. Counseling could also offer much-needed guidance to take control of this burden.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 2 |
| Year 2 | 5 | 2 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 7 | 4 |
| Year 20 | 8 | 5 |
Cost Estimates
Year 1: $3000000000 (Low: $2500000000, High: $3500000000)
Year 2: $3400000000 (Low: $2900000000, High: $3900000000)
Year 3: $3800000000 (Low: $3300000000, High: $4300000000)
Year 5: $4500000000 (Low: $4000000000, High: $5000000000)
Year 10: $5000000000 (Low: $4500000000, High: $5500000000)
Year 100: $27000000000 (Low: $24000000000, High: $30000000000)
Key Considerations
- Potential impact on federal budget due to changes in loan repayment terms.
- Long-term economic benefits vs. short-term fiscal impacts from providing better borrower terms.
- Effects on student borrowing behavior and educational attainment due to improved loan conditions.
- Sustainability and scalability of online counseling resources in response to increased demand.