Student Loan Tax Elimination Act
Source: Congress.gov ·
293 words in original text
What This Bill Does
This bill removes origination fees from Federal Direct loans, which are loans the federal government makes directly to students. The bill amends the Higher Education Act of 1965 to eliminate these charges.
Who It Affects
Students who take out Federal Direct loans, including those who apply for Federal Direct Consolidation Loans (loans that combine multiple federal student loans into one).
Key Provisions
• The government repeals the section of law that allows origination fees on Federal Direct loans (Sec. 2(a))
• This change applies to loans where the first payment of the loan amount is made on or after March 27, 2022, or for consolidation loans where the application is received on or after that date (Sec. 2(b))
What Changes
If this bill becomes law, the federal government will no longer charge origination fees when students receive Federal Direct loans. Students borrowing money through this program will no longer have these fees subtracted from their loan amounts.
Important Definitions
Origination fee: A charge the government collects when it gives you a loan. The exact percentage or amount is not specified in the bill text.
Federal Direct Consolidation Loan: A loan that combines multiple federal student loans into a single loan.
Effective Date
The changes apply to loans where the first disbursement of principal is made, or the application is received, on or after March 27, 2022 (Sec. 2(b)).
Important: This plain English summary was generated by AI and is provided for informational purposes only.
It is not legal advice. Always consult the official bill text on Congress.gov
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