What’s new: Many current students are eligible for loan reductions

• Current students would only be eligible for relief if their loans originated before July 1, 2022. 
• Applications aren’t being taken yet. For more info, students can sign up at https://www.ed.gov/subscriptions. See details here: cnbc.com.

What’s next: College costs are in issue in the 2022 midterm elections. Today, House Democrats proposed new legislation to increase Pell Grants and reduce rates on all new federal student loans. It’s not expected to pass now, but it will be an issue during congressional campaigns:

• Over a five-year period, the legislation would double the maximum Pell Grant to $13,000 and then make sure it stays even with inflation. An additional $15,000 per year will be received by families that receive food stamps or Medicaid. Students would be able to use Pell Grants for up to 18 semesters, up from 12 now.
• “Interest rates on new federal student loans would be lowered starting in July 2023 to match the yield on the 10-year Treasury note, and all federal student loans would be capped at a 5% interest rate,” according to apnews.com. “Current caps vary depending on the type of loan but can reach as high as 10.5%. Older loans would be eligible for refinancing at the lower interest rates.”