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Polis, Hanna introduce bill to make federal student loans simple and affordable
Bipartisan legislation uses innovative income-based repayment model to ensure payments are manageable
Reps. Jared Polis (D-CO) and Richard Hanna (R-NY) today introduced the Earnings Contingent Education Loans (ExCEL) Act, a bipartisan bill to streamline the complicated student loan process and peg graduates’ repayments to an affordable percentage of their income until the loan is repaid. Under the ExCEL Act, graduates would pay nothing during periods of unemployment and would pay more throughout their careers as their incomes rise – without any additional paperwork, since payments would be deducted automatically from their paychecks.
“Financial ruin should never be the cost of receiving a higher education, but that is the sad reality for thousands of recent graduates,” Polis said. “By ensuring that graduates are always paying an affordable percentage of their income, the ExCEL Act replaces the complicated array of loans, subsidies, deferments, forbearances, and fluctuating interest rates with a simplified and manageable repayment process. This new process protects graduates when they most need it – when they graduate from school, if they go through tough times, or if they choose a career in public service.”
“At the height of the financial crisis, default rates on mortgages were around 9 percent. Today, approximately 13 percent of recent college graduates are defaulting on their student loans within the first 3 years of entering repayment,” Hanna said. “This staggering number amounts to a crisis in its own right and Congress must do more to streamline and simplify the loan process for students. The ExCEL Act does just this – it consolidates loan programs and simplifies the repayment process so that a student’s monthly loan payments reflect their earned income. It also enacts commonsense reforms that limit interest from accruing beyond a certain point and give students and families greater flexibility.”
The ExCEL Act was first introduced in the 113th Congress by Polis and former Rep. Tom Petri (R-WI), with Hanna as a leading cosponsor.
Polis, a senior member of the House Education and Workforce Committee, represents two major research universities – Colorado State University and the University of Colorado at Boulder – as well as several leading technical and community colleges, including Colorado Mountain College and Front Range Community College. The founder of several charter schools, Polis is a longstanding advocate for using innovative models to improve access to education at all levels.
Yesterday, Polis introduced the Affordable College Textbooks Act, a bill to save college students hundreds of dollars per semester by improving access to free, open-source textbooks.
The full text of the ExCEL Act is available here.