June 23, 2022
Cortez Masto Introduces Legislation to Reform Student Loan Program, Prioritize Working Nevadans
Washington, D.C. – Today, on the 50th anniversary of the Pell Grant program, U.S. Senator Catherine Cortez Masto (D-Nev.) introduced the Student Loan Relief and College Affordability Act to reform the Pell Grant and federal student loan system so that more Nevadans can access higher education without burdensome debt. Cortez Masto’s legislation increases the amount of Pell Grants students can receive and targets student loan forgiveness to the low- and moderate-income Americans who will most benefit from this relief. The legislation also reforms the federal student loan system by simplifying repayment plans and ending interest capitalization.
“All Nevadans deserve a chance to pursue higher education, and with a responsible and commonsense approach that provides immediate relief to struggling borrowers, increases Pell Grants, and reforms the system for future borrowers, we can once again make college affordable for all Nevadans,” said Senator Cortez Masto.
The Student Loan Relief and College Affordability Act would:
- Double the Pell Grant: When the Pell Grant came into existence 50 years ago, it covered, on average, nearly 80% of the cost of higher education. Today, it covers only 30% of that cost. This legislation would double the maximum Pell Grant to $13,000 over ten years to restore its purchasing power, increasing the amount of Pell Grants all students receive, and increasing the number of students eligible for grants.
- Retroactively double the Pell Grant to provide targeted loan forgiveness to student borrowers: To provide immediate relief to low- and moderate-income borrowers, the legislation forgives student loan holders for an amount equal to what they received in Pell Grants during their undergraduate educations, effectively doubling their Pell Grants. If the borrower received an amount of Pell greater than their current loan balance, the entire balance will be forgiven.
- Reform the Federal Student Loan system: The legislation would overhaul the current confusing system of repayment plans into two simple plans, end interest capitalization on Federal Direct Loans, and improve counseling to make students more aware of federal student aid and repayment options.
- Offset costs through a 1% excise tax on large corporate stock buybacks and closing a tax loophole on the investments of the ultra-wealthy.
The full text of the bill is available here, and a section-by-section summary of it is available here.