Sponsor
Haley Stevens
Representative · D-MI
Representative · D-MI
The bill gives many dependent students and lower-/middle-income families greater grant eligibility by counting parental federal student-loan debt (and indexing the allowance for inflation), but it limits relief through income and dollar caps and creates additional administrative/reporting burdens that could slow implementation.
Dependent students and their parents with parental federal student loans will see a lower Student Aid Index, increasing grant eligibility or award amounts beginning in award year 2027–2028.
The benefit is targeted toward lower- and middle-income families by excluding parents with AGI above $200,000 (single) or $400,000 (married), focusing aid where it's more likely needed.
Dollar allowances are indexed to CPI so the real value of the parental-debt allowance is preserved over time.
The allowance is capped at $4,000, so parents with large outstanding federal student debt may get substantially less relief than a full 15% of debt would provide.
Families with high parental federal student debt but whose AGI exceeds the specified thresholds (>$200k single / >$400k married) will be excluded from the allowance, leaving some heavily indebted higher‑income households without relief.
Calculating outstanding debt (principal, interest, fees) and producing annual, disaggregated reports increases Department of Education administrative burden and costs and could delay determinations or slow policy responses for affected students.
Based on analysis of 3 sections of legislative text.
Adds a parent student‑loan allowance to the Student Aid Index from AY 2027–2028 equal to the lesser of $4,000 or 15% of parental Federal loan debt, with income caps and CPI indexing.
Official title: To amend the Higher Education Act of 1965 to provide a student loan allowance calculation for purposes of determining the student aid index.
Introduced January 22, 2026 by Haley Stevens · Last progress January 22, 2026
Adds a new "student loan allowance" to the Student Aid Index used to calculate financial aid for dependent undergraduate students, starting with award year 2027–2028. The allowance reduces parental income used in aid calculations by the lesser of $4,000 or 15% of parents' outstanding Federal student loan debt (subject to income caps for higher‑earning parents) and requires annual CPI adjustments to the dollar amounts and yearly reporting to Congress about who benefits and average allowance amounts. The change affects dependent students and their parents by potentially lowering the Student Aid Index and increasing eligibility for need‑based aid (including Pell Grant likelihood). The Department of Education must publish inflation adjustments annually and send Congress a report on impacts beginning July 1, 2028 and annually thereafter.