Sponsors (27)
Introduced August 1, 2025 by Robert C. Scott · Last progress August 1, 2025
This bill expands grant aid and lowers borrowing costs for many students while simplifying repayment and rehabilitation, but does so at substantial fiscal cost and with implementation, privacy, and some eligibility‑tightening tradeoffs that could create winners and losers among students, institutions, and taxpayers.
Low‑ and moderate‑income students (including some DACA/'Dreamer' applicants): Pell Grant maximums rise to $10,000–$14,000 (2026–2031) with CPI indexing thereafter, Pell funding made mandatory, and SAI adjustments (negative SAI treatment and a -$1,500 floor for recent benefits recipients) expand and stabilize grant aid.
Borrowers (current and future students, including graduate/professional borrowers): Restores subsidized Stafford eligibility for many graduate/professional students, eliminates origination fees on affected loans, and allows refinancing/consolidation into Direct loans with a capped (and fixed) rate structure (including refinancing eligible private loans), lowering borrowing costs and creating rate/
Borrowers (especially low‑income and defaulted borrowers): Creates streamlined repayment (a fixed 10‑year and an IDR option), prohibits interest capitalization under the IDR plan, standardizes repayment application order and prepayment without penalty, expands/clarifies Public Service Loan Forgiveness eligibility, and makes rehabilitation/re‑enrollment easier (including automatic enrollment paths)
Taxpayers and the federal budget: Converting Pell to mandatory funding, raising Pell maximums, restoring subsidized graduate loans, expanding forgiveness and refinancing options, and other borrower benefits substantially increase long‑term federal outlays and could raise deficits or require offsets.
Colleges, servicers, guaranty agencies, and the Department of Education: Extensive statutory reorganizations, new reporting and SAP rules, accounting/payment‑flow changes, and other implementation requirements create significant administrative and IT burdens, transition costs, and risk of operational disruption during rollout.
Borrowers' privacy and data accuracy: Automatic use of IRS tax‑return data for enrollment/re‑enrollment and rehab simplifies processes but raises privacy concerns and risks of incorrect automatic determinations if tax data are outdated or wrong.
Based on analysis of 12 sections of legislative text.
Makes Pell grants mandatory and larger, restores prior HEA provisions, changes loan rates/terms (including refinancing and no interest capitalization), restores grad subsidized loans, and strengthens borrower protections.
Changes federal student aid by making Pell Grants mandatory and larger, restoring prior Higher Education Act provisions, and rewriting many loan rules. It adjusts Pell maximums and funding, restores graduate subsidized loans for most students, bans capitalization of interest in many contexts, creates new borrower protections for prepayments and loan rehabilitation, sets a new interest-rate formula with a 5% cap, and authorizes federal refinancing of certain FFEL and private loans into Direct loans. The bill affects grant funding, loan eligibility and rates, repayment and discharge rules, servicer and guaranty agency obligations, and creates new data-sharing and borrower-notice requirements; many changes take effect July 1, 2026, while some protections apply on enactment.