YourVoice.Now Summary
Your MoneyTransparency & AccountabilityDoubles the maximum Pell Grant to $10,000 and caps student loan interest at 5% — leftover balances cancelled after 20 years.
Your Money
The top Pell Grant award would be $10,000 for the 2026-2027 school year. It would rise $1,000 each year to $14,000 by 2030-2031, then move with the cost of living.
Students whose household got a benefit such as SNAP or Medicaid in the past two years would be treated as able to pay nothing. Their grant would run $1,500 above the maximum award.
Pell Grants now stop after 12 semesters of full-time study. The limit would go back to 18 semesters, which matters for students who study part time or change programs.
Pell Grants now stop once a student finishes a bachelor's degree. Students who used fewer than 18 semesters could spend what is left on a first graduate degree.
Students without legal status who came to the country as children could get Pell Grants, federal loans, and work-study. They would need a high school diploma, college study, or military service, among other paths.
Borrowers with federal loans issued before July 2026 and rates above 5% could refinance with the Education Department. Private student loans could be refinanced into federal loans, but those refinanced loans could not get public service forgiveness.
Under the income plan, what is left is wiped out after 240 monthly payments over at least 20 years. Borrowers with any graduate loan would need 300 payments over at least 25 years.
Borrowers who first owed $12,000 or less could clear the debt after 120 payments over 10 years. Each $1,000 borrowed above $12,499 adds 12 more payments.
Starting July 1, 2026, a borrower whose income-based payment works out to $0 would no longer count as in default. The income information used has to cover the date the loan defaulted.
A 2025 law capped how much graduate students and parents could borrow and ended Grad PLUS loans. Those caps would be dropped and Grad PLUS loans would come back.
A 2025 law created Workforce Pell Grants for short job-training programs. Repealing that law would end that aid for those students.
A 2025 law left family farms, small businesses with 100 or fewer workers, and commercial fishing businesses out of the aid formula. Repealing it would count those assets again, which can lower a student's aid.
Federal student loans are cut by a fee before the money reaches the school. That fee would be set to zero for loans first paid out on or after July 1, 2026.
Rates on new loans would follow the 10-year Treasury rate but could never pass 5%. The rate would stay fixed for the life of the loan.
Interest you do not pay is now added to your loan balance, so you pay interest on interest. That would stop, and unpaid interest would stay separate from the amount you borrowed.
Loans made on or after July 1, 2026 could be repaid only two ways: a fixed plan or the Income-Driven Repayment plan. Older loans stay on their current plan, and can move to either new plan at any time.
The Income-Driven Repayment plan would charge nothing on income below 225% of the poverty line for your family size. Above that line, payments are 5% of income for undergraduate debt and 10% for graduate debt.
Public Service Loan Forgiveness would cancel the rest of the debt after 96 qualifying monthly payments — eight years instead of ten. You would not need to still hold the public service job when the debt is cancelled.
Lenders would have to ask credit bureaus to erase the default record once a defaulted loan is paid off, folded into a consolidation loan, or brought back to good standing.
Wages can be taken automatically to collect a defaulted student loan. That would pause after the fifth payment under a rehabilitation deal, and a borrower can use this once.
Transparency & Accountability
The Education Department would build a public, searchable list of jobs that count for public service forgiveness. Borrowers would also get an online portal showing how many payments they have made.
Private student lenders would have to report their loan balances, average interest rates, defaults, and late payments. The reports go to federal agencies and to committees in Congress.
Once a month counts toward public service forgiveness, the Education Department could not later decide it did not count. Borrowers who are denied would get a 90-day pause on payments and a second look.
A 2025 law would cut off federal aid to college programs whose graduates earn too little. Repealing it removes that penalty for schools.
More about this bill
Federal college aid would grow for students and for people paying off old loans. The largest Pell Grant would double to $10,000 for the 2026-2027 school year. It would reach $14,000 by 2030-2031, then rise with prices. Students whose family used food or health aid in the past two years would get $1,500 more. Pell Grants could also pay for a first graduate degree. You could use Pell for 18 semesters instead of 12. Students brought to the country as children could qualify for federal aid. Loans first paid out on or after July 1, 2026 would cost less. The interest rate would be capped at 5%. The fee taken out before the money reaches the school would drop to zero. Unpaid interest could no longer be added to the amount you borrowed. Graduate students could borrow without paying interest while they study. If you hold older federal loans, or private student loans, you could refinance at the new capped rate. Two repayment plans would replace today's list of choices for new loans. One is a fixed plan. The other sets your payment from your income. Under it you would owe $0 while your income stays under 225% of the poverty line. Any balance left would be cancelled after 20 years of payments. Graduate debt would take 25 years. Debts that started under $12,000 could clear in 10 years. Public service workers would need 96 payments instead of 120. That is eight years of work instead of ten. If you are in default, a payment that works out to $0 would end that status. Money taken from your paycheck would stop after five payments. The default would come off your credit report once the loan is settled. The college aid parts of the 2025 budget law would also be repealed. That would drop the new caps on graduate and parent borrowing. It would end the new Pell Grants for short job-training programs. Family farms and small businesses would again count as assets in aid formulas. Colleges would no longer lose federal aid over low graduate pay.
Congressional Summary
Lowering Obstacles to Achievement Now Act or the LOAN Act This bill revises federal student aid programs, including the Federal Pell Grant program and the Public Service Loan Forgiveness (PSLF) program. It also repeals the education provisions that were enacted under P.L. 119-21 (commonly known as the One Big Beautiful Bill Act). Among other provisions, the bill revises the Federal Pell Grant program by (1) providing funding to increase the maximum award for each eligible student, and (2) allowing income-eligible graduate students to utilize their remaining Pell Grant eligibility toward their first graduate degree. Changes to the PSLF program include (1) reducing the number of monthly loan payments required for loan forgiveness, and (2) removing the requirement that a borrower must be employed in a public service job at the time of forgiveness. The bill makes Dreamer students (i.e., students who have been granted Deferred Action for Childhood Arrivals status and who entered the United States before the age of 18) who meet certain educational criteria eligible for federal financial aid. The bill also (1) establishes refinancing programs for federal and private student loans; (2) creates a new income-driven repayment plan; and (3) repeals origination fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. The bill repeals the education provisions that were enacted under P.L. 119-21. For example, the act addressed the amount of federal financial aid available to students by changing the mix and availability of student loans. (For more information, see CRS Report R48727.)
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-08-01
- Date Added
- 2026-06-13
- Source
- Congress.gov →
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