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119-s-4097119th CongressWALLET

State-Based Education Loan Awareness Act

Sponsored By: Senator Murkowski, Lisa [R-AK]

In Committee

Summary

State-based education loan programs would get a clear legal definition and an explicit place in the Higher Education Act. The bill would also require a Government Accountability Office report within 2 years on how borrowing patterns change after recent student loan law changes.

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  • Students and parents: Would make access to state-based loans conditional on receiving a clear institutional notice to exhaust federal loan options first and to be informed of interest rates, fees, and benefits like income-driven repayment and forgiveness.
  • States and nonprofit lenders: Would set rules for state programs such as state authorization, no federal funding or guarantees, and interest rates and fees at least as favorable as Direct PLUS loans.
  • Colleges and financial aid offices: Would need to include specific advisories in financial aid offers about federal loan options and the comparative terms of state-based loans.
  • Federal oversight and data: Would require a GAO report within 2 years detailing changes in borrowing by source, differences in interest rates, use of multiple loan types, and borrower outcomes like repayment, delinquency, and default, with multiple disaggregations.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

State-based student loan rules

This bill would define state-based education loan programs for students and parents. Those programs would be run by a State agency, State authority, or a nonprofit. Loans would not be funded, insured, or guaranteed by the Federal Government. State loans would have to match or beat the interest rate and fees of Federal Direct PLUS loans, measured under the Truth in Lending Act, when made. A borrower would be eligible only after their school told them to exhaust Federal Direct (Title IV) loans first. The school would also have to tell them about federal loan rates, income-driven repayment, loan forgiveness, forbearance or deferment, interest subsidies, and tax benefits. The bill would also add arrangements for state-based loans to the Higher Education Act's list of covered agreements.

Sponsors & CoSponsors

Sponsor

Murkowski, Lisa [R-AK]

AK • R

Cosponsors

  • Sen. Reed, Jack [D-RI]

    RI • D

    Sponsored 3/16/2026

  • Sen. Cassidy, Bill [R-LA]

    LA • R

    Sponsored 3/16/2026

  • Sen. Shaheen, Jeanne [D-NH]

    NH • D

    Sponsored 3/16/2026

  • Sen. Sullivan, Dan [R-AK]

    AK • R

    Sponsored 3/25/2026

  • Sen. Lankford, James [R-OK]

    OK • R

    Sponsored 4/14/2026

  • Sen. Grassley, Chuck [R-IA]

    IA • R

    Sponsored 5/21/2026

Roll Call Votes

No roll call votes available for this bill.

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