LOAN Act
Key claim: The LOAN Act proposes to expand Pell Grant access to income-eligible graduate students, reduce PSLF payment requirements, extend federal financial aid eligibility to DACA recipients, and repeal education provisions of the One Big Beautiful Bill Act.
Abstract
(HR4862 · 119th Congress) 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 .) Latest action (2025-08-01): Referred to the Committee on Education and Workforce, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Why this matters
The LOAN Act bundles several long-debated federal aid reforms — PSLF acceleration, graduate Pell, DACA aid eligibility, and reversal of OBBBA education provisions — into a single vehicle, making it a bellwether for the Democratic counter-agenda on higher-ed policy. If enacted, it would meaningfully shift access and forgiveness pathways for millions of students and borrowers; even as introduced, it signals the policy lanes likely to be contested in the next reauthorization cycle.