WASHINGTON – Today, Congresswoman Marcia L. Fudge (OH-11) re-introduced the Parent PLUS Loan Improvement Act of 2019 to reduce the financial burden placed on parents and families from high-interest Parent PLUS loans. The bill lowers and caps current interest rates, allows for an income-based repayment option for families, and eliminates origination fees.
“The rising costs associated with a college education already pose a significant barrier to earning a degree. Pell grants and Stafford Loans are not enough to fully cover college expenses, which can leave parents and students with a hefty financial burden,” said Rep. Fudge. “As PLUS Loan interest rates continue to climb, it is the duty of Congress to ensure parents and families are not crippled by staggering college costs. The Parent PLUS Loan Improvement Act allows for greater access, flexibility, and transparency during the student loan process, and provides much-needed relief for Parent PLUS Loan holders nationwide.”
In its current form, the Higher Education Act (HEA) requires any borrower that takes on a Federal Direct PLUS Loan to pay interest on that loan at 4.6 percent or 10.5 percent. Borrowers are also charged a 4 percent origination fee. Entrance counseling is required, however, specific guidance on exit counseling does not exist. The Parent PLUS Loan Improvement Act would amend the HEA and help fill the gap between Pell grants awarded and the substantial tuition costs that often remains.
“As a former President of a university that serves high percentages of low-income and first-generation students, I have seen first-hand the sacrifices parents make to pay for college for their children,” said Dr. Harry L. Williams, President and CEO of the Thurgood Marshall College Fund. “The Parent Plus Loan Act, if passed and signed by the President, has the potential to make college more affordable and attainable for students attending our nation’s Historically Black Colleges and Universities (HBCUs) as well as other higher education institutions by removing cost-barriers and adding much needed flexibility for borrowers.”
The Parent PLUS Loan Improvement Act was first introduced by Rep. Fudge in 2016 and re-introduced in the 115th Congress.
Click here to read the bill text.