Alleviating Intergenerational Debt Act; AID Act
Summary
The Alleviating Intergenerational Debt Act (AID Act) amends the Higher Education Act of 1965 to adjust the student aid index calculation. This adjustment introduces a student loan allowance based on parents' outstanding federal student loan debt. The allowance, capped at $4,000 or 15% of the debt, aims to reduce the expected family contribution for financial aid eligibility, starting in the 2027-2028 award year.
Expected Effects
The AID Act will likely increase the number of students eligible for financial aid, particularly Pell Grants. It also mandates the Secretary of Education to report annually to Congress on the impact of these changes. This includes data on the number of students benefiting from the student loan allowance and the average amount of the allowance.
Potential Benefits
- Increased financial aid eligibility for students with parents carrying federal student loan debt.
- Reduced expected family contribution, making college more affordable.
- Targeted relief for families with student loan burdens.
- Annual reports to Congress providing transparency and data on the program's impact.
- Adjustment for inflation to maintain the value of the allowance over time.
Potential Disadvantages
- Income limits may exclude some higher-earning families with significant student loan debt.
- The allowance is capped, potentially limiting the benefit for families with very high debt.
- Complexity added to the financial aid calculation process.
- Potential for increased government spending on student aid programs.
- The act does not address the root causes of student loan debt.
Constitutional Alignment
The bill aligns with the General Welfare Clause (Article I, Section 8) by aiming to improve access to higher education. Congress has the power to legislate in areas that promote the general welfare of the United States. The bill does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).