H.R. 4555: Student Loan Contract Act of 2025 (119th Congress) Bill Summary

This bill, known as the Student Loan Contract Act of 2025, proposes a change to the terminology and structure related to student loans under the Higher Education Act of 1965. Here’s a summary of its key components:

Renaming of Master Promissory Notes

The bill amends the existing regulations surrounding student loans, particularly the master promissory notes that borrowers sign. Under the proposed legislation:

All master promissory notes for loans issued under Part D of the Higher Education Act will be renamed to student loan contracts.
This change will apply to loans made for enrollment periods starting on or after the enactment date of the bill.
Each student loan contract will be specific to loans made for a particular academic year, meaning that the contract can only be used for loans taken out in that award year.

Disclosures and Clarification

The bill brings clarity on how these contracts should be used. It specifies the following points:

A student loan contract will be used only in conjunction with loans from the same award year, ensuring that borrowers understand which loans are covered under that contract.
Additional terminology changes will be made in existing sections of the Higher Education Act to incorporate the new term student loan contract.

Purpose and Intent

The intent behind these changes is to standardize language and improve understanding related to student loans. By renaming master promissory notes to student loan contracts, the bill aims to reflect the nature of the agreement more accurately and clarify the terms under which loans are offered.

Conforming Amendments

In addition to implementing the name change, the bill also includes conforming amendments to ensure that the language used throughout the Higher Education Act is consistent with the new terminology.

Implementation Timeline

The changes will come into effect following the enactment of the bill, applying to new loans affected by this legislation going forward. Existing loans under the previous master promissory notes will remain governed by the terms laid out in those original documents.