Overview

Title

To amend the Higher Education Act of 1965 to provide relief for borrowers of Federal Direct PLUS loans made on behalf of students.

ELI5 AI

H.R. 9753, the "Parent Plus Parity Act," is like a magic wand that helps parents who borrow money to pay for their kid's college. It lets them pay back the loans in a special way if money is tight and even makes the loans disappear if they face big problems, like being unable to work or if their child gets their own loans forgiven.

Summary AI

H.R. 9753, known as the "Parent Plus Parity Act," aims to alleviate the financial burden on borrowers of Federal Direct PLUS loans, which are taken out by parents on behalf of their children for higher education. The bill proposes to expand repayment plan options to include income-contingent plans and provide automatic loan discharge in cases of total and permanent disability of the student or financial hardship of the parent borrower. Additionally, it makes borrowers eligible for public service loan forgiveness and allows for the automatic discharge of loans if the student for whom the loan was taken receives a loan discharge. The bill delegates the authority to the Secretary of Education to interpret and implement these changes.

Published

2024-09-23
Congress: 118
Session: 2
Chamber: HOUSE
Status: Introduced in House
Date: 2024-09-23
Package ID: BILLS-118hr9753ih

Keywords AI

parent plus parity act federal direct plus loans income-contingent repayment plans loan discharge public service loan forgiveness secretary of education financial hardship total and permanent disability administrative costs verification of claims

Sources

Bill Statistics

Size

Sections:
2
Words:
2,579
Pages:
13
Sentences:
41

Language

Nouns: 677
Verbs: 194
Adjectives: 99
Adverbs: 11
Numbers: 114
Entities: 85

Complexity

Average Token Length:
3.86
Average Sentence Length:
62.90
Token Entropy:
4.92
Readability (ARI):
31.44

AnalysisAI

General Summary of the Bill

The bill titled "Parent Plus Parity Act" proposes amendments to the Higher Education Act of 1965. It aims to provide relief for borrowers of Federal Direct PLUS loans taken out on behalf of students. These changes include expanding repayment options and introducing new provisions for the discharge of these loans under specific conditions such as the student's permanent disability, hardship experienced by the borrower, or eligibility for public service loan forgiveness. Furthermore, the bill entrusts the Secretary of Education with the interpretative authority over these amendments, taking into account costs and public health considerations.

Summary of Significant Issues

The bill faces several notable challenges:

  • Broad Language for 'Hardship' Discharge: The criteria for hardship discharge are vague and subjective, including factors like potential future earnings, which could result in inconsistent application.

  • Administrative Costs and Complexity: The new repayment and discharge options may impose additional administrative burdens and costs on the Department of Education, possibly going unaccounted in the bill.

  • Delegation of Interpretive Authority: Granting the Secretary of Education broad interpretive powers without detailed guidelines risks inconsistent policy application and could lead to shifts dependent on administrative changes.

  • Lack of Budgetary Planning: The bill does not clearly outline the financial implications of the introduced provisions, raising concerns about potential underestimation of costs.

  • Automatic Discharge Fairness: The criteria for automatic discharge may lead to uneven treatment of borrowers, which could be perceived as unfair.

  • Verification Concerns: Failure to establish clear guidelines for verifying disability or hardship claims could open the system to fraud or misuse.

Impact on the Public

Broad Impact: The proposed amendments could offer meaningful financial relief to many borrowers who are struggling to manage their Parent PLUS loans. The introduction of more flexible repayment plans, such as income-contingent options, could make it easier for parents to manage their debts over time. Additionally, provisions for loan discharge in cases of disability or hardship could significantly ease financial burdens on families facing challenges.

Impact on Specific Stakeholders:

  • Parent Borrowers: For those taking out loans to support their children’s education, the bill offers increased repayment flexibility and support mechanisms in case of financial distress, potentially reducing long-term debt stress. However, the bill's ambiguous language regarding 'hardship' and the complexities involved in demonstrating eligibility for discharge may create hurdles.

  • Department of Education: The administrative body may face increased workload and potential costs associated with managing the expanded repayment and discharge provisions. The responsibility to clearly interpret and enforce the bill’s provisions without contributing to inconsistency might present operational challenges.

  • Students and Families: Families stand to benefit from simplified loan repayment processes and the possibility of loan discharges under particular conditions, which may encourage higher education pursuits without overwhelming financial fears. It might lead to higher financial security and less economic strain for dependent students and their families.

While the bill aims at easing the financial burden on parent borrowers of PLUS loans, its success hinges on precise implementation and the establishment of clear guidelines to navigate potential ambiguities and ensure fairness and consistency in application.

Issues

  • The broad language used for 'hardship' discharge in Section 2(e) may lead to inconsistent application of the provisions, as factors such as 'potential future earnings' and 'age of a borrower' are subjective and can vary greatly from case to case.

  • The expanded repayment and discharge options outlined in Section 2(a) and 2(b) could increase administrative costs and complexity for the Department of Education, which might not be fully accounted for in the bill.

  • Section 2(f) delegates interpretive authority to the Secretary of Education without clear guidelines, potentially leading to inconsistent application or policy shifts based on administrative changes, which could affect the stability and predictability of loan relief measures.

  • The bill does not provide specific cost implications for the expansion of repayment plan options and discharge provisions in Section 2, potentially leading to an underestimation of its budgetary impact.

  • The provision for automatic discharge of parent PLUS loans in Section 2(d) might lead to uneven treatment of borrowers, depending on the basis of the student's loan discharge liabilities, raising fairness issues.

  • The bill lacks explicit measures for verifying claims for discharge due to disability or hardship in Section 2(e), opening potential risks of misuse or fraud.

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The first section of this act is about its name. It says that the act can be called the "Parent Plus Parity Act".

2. Relief for borrowers of Federal direct PLUS loans made on behalf of students Read Opens in new tab

Summary AI

The section provides relief for Parent PLUS loan borrowers by expanding repayment options, including income-contingent plans starting July 1, 2024, and introduces provisions for discharge of these loans in cases of the student's total and permanent disability, hardship faced by the parent borrower, or public service loan forgiveness. It also grants authority to the Secretary of Education to interpret these amendments considering cost and public health.