Bill Overview
Title: LOAN Act
Description: 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.
Sponsors: Rep. Wilson, Frederica S. [D-FL-24]
Target Audience
Population: Eligible students for federal student aid and individuals pursuing Public Service Loan Forgiveness
Estimated Size: 22000000
- The LOAN Act impacts students who are eligible for federal student aid programs.
- The act involves changes to the Pell Grant, which targets low-income undergraduate students.
- The act also addresses the Public Service Loan Forgiveness (PSLF) program, which affects individuals working in public service jobs who have federal student loans.
- It may indirectly affect educational institutions that benefit from students supported by Pell Grants.
Reasoning
- Considering the population distribution, the LOAN Act is likely to primarily impact low-income students and individuals working in public service jobs who have student loans. This group includes low-income undergraduates reliant on Pell Grants for education funding, as well as individuals with significant student debt working towards Public Service Loan Forgiveness.
- Given the budget constraints, the policy is able to increase administrative efficiency and provide strategic financial benefits for these target groups. For instance, students who receive increased Pell Grant awards will have lower student debt burdens and experience enhanced wellbeing by either less time worrying about loan repayment or extended educational opportunities.
- Furthermore, public service workers benefiting from reduced loan forgiveness payments may improve their financial stability, thus increasing their wellbeing.
- Considering commonness scores, low-income students receiving Pell Grants are far more common than those successfully navigating the PSLF, so the impact though profound on a few, spreads wider among undergraduates.
Simulated Interviews
College Student (California)
Age: 19 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 15/20
Statement of Opinion:
- The increase in the Pell Grant is a huge relief. Now I can focus more on my studies rather than worrying about taking up another part-time job.
- Education should be accessible to everyone regardless of income, and this policy helps break some barriers.
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 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Public School Teacher (Texas)
Age: 32 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Reducing the number of monthly payments for loan forgiveness feels like a wrestling weight lifted off my shoulders.
- I've spent years working in underserved schools because of my belief in equity in education, this policy makes it a bit easier to continue my work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Nurse (New York)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- With the reduction in loan forgiveness payments, I can save more each month or pay down other debts sooner.
- This policy reassures me that the public service sector remains sustainable even for those with student debt.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Graduate Student (Ohio)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- Although I don't qualify for an increased Pell Grant now, its increase during my undergrad might have reduced the debt I'm taking now.
- This policy is a positive step toward affordability in higher education.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
University Administrator (Florida)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 7/20
Statement of Opinion:
- Increased Pell Grants provide larger financial security nets for our students, potentially improving graduation rates.
- Financial stress is a primary reason students drop out, so any alleviation is beneficial to both the students and our institution.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Social Worker (Illinois)
Age: 26 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 9/20
Statement of Opinion:
- It's encouraging to see the government making public service careers more accessible by reducing the loan burden.
- I hope this pushes more people to pursue and stay in public service roles.
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 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Community College Instructor (New Mexico)
Age: 40 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- While I do not directly benefit from the policy, it positively creates opportunities for the underserved students I teach.
- Education is more than a privilege; it should be treated like a public good. This policy aids in those efforts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Public Defender (Georgia)
Age: 24 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 9/20
Statement of Opinion:
- This policy reduces some financial pressure, making it a bit easier to focus on serving the community without constant worries about loan debt.
- It's sensible to support those contributing to public service roles.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Medical Resident (Michigan)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 6/20
Statement of Opinion:
- Although changes to the Pell Grant don't directly impact me, the PSLF modifications are a lifeline in managing my educational debt and career choices.
- It's reassuring knowing efforts are being made to keep public service an attainable career path.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Undergraduate Student (Minnesota)
Age: 21 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- The expanded Pell Grant is vital for first-generation students like me.
- It provides more room to focus on academics and less on financial stress.
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 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $6500000000 (Low: $6000000000, High: $7000000000)
Year 2: $6600000000 (Low: $6100000000, High: $7100000000)
Year 3: $6700000000 (Low: $6200000000, High: $7200000000)
Year 5: $6900000000 (Low: $6400000000, High: $7400000000)
Year 10: $7500000000 (Low: $7000000000, High: $8000000000)
Year 100: $15000000000 (Low: $14000000000, High: $16000000000)
Key Considerations
- The bill's impact on federal budgets necessitates careful fiscal planning.
- Potential adjustments in Pell Grant awards could affect educational institutions differently depending on their demographics.
- Implementation must ensure efficient changes to reduce unnecessary spending and bureaucratic delay.