H.R. 3165: Student Loan Tax Elimination Act

This bill, known as the Student Loan Tax Elimination Act, aims to amend the Higher Education Act of 1965 by removing the origination fees on Federal Direct loans. Here are the main components of the bill:

1. Elimination of Origination Fees

The primary provision of the bill is the repeal of origination fees that are currently charged on Federal Direct loans. Origination fees are a type of upfront charge that borrowers must pay when they take out federal student loans. By eliminating these fees, the bill seeks to reduce the overall cost of borrowing for students and their families.

2. Impact on Future Loans

The changes proposed by this bill would affect loans under part D of title IV of the Higher Education Act of 1965. Specifically, the bill states that the repeal of origination fees will apply to:

• Loans where the first disbursement of principal occurs on or after July 1 following the enactment of the bill.
• Federal Direct Consolidation Loans for which the application is received on or after this same date.

3. Legislative Process

The bill was introduced in the House of Representatives and has been referred to the Committee on Education and Workforce for consideration. It was sponsored by Mr. Smucker and co-sponsored by Ms. Davids of Kansas.

4. Overall Purpose

The overall goal of the bill is to alleviate some financial burdens on students taking out federal loans by eliminating fees that add to the cost of education, thereby making college more affordable.

Relevant Companies

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