New Bill Would Reduce Student Loan Debt, Fund Workforce Training
- The proposed federal legislation would provide a $10,000 credit to apply toward undergraduate student loan debt or additional education.
- This one-time credit could go toward federal or private undergraduate student loans.
- Recipients could also use the credit to pay tuition for further education or workforce training.
Federal legislation introduced this month would provide a one-time credit of $10,000 for recipients to apply toward undergraduate student loan debt or additional education.
Pennsylvania Rep. Conor Lamb, a Democrat, introduced the Pay Down, Upskill Act to help address the student debt crisis and fund workforce training. The bill's two-pronged approach could impact millions of adults ages 18-65 who make less than $75,000 per year.
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“Student loans are supposed to help people reach their career goals,” Lamb said in a press release. “Instead, it has burdened too many borrowers with unsustainable amounts of debt, while the cost of higher education is increasingly out of reach for too many.”
According to Federal Student Aid, 42.9 million Americans owed about $1.59 trillion in federal student loan debt as of 2021's second quarter. This excludes private student loans.
Lamb's bill would affect American adults who meet age and income criteria set by the previous COVID-19 economic impact payments. Those who receive the credit may use it to pay off outstanding undergraduate student loan debt or apply their credit toward tuition and fees for further education or workforce training. Qualifying institutions may include public and nonprofit colleges and universities, plus certain certificate programs.
As proposed, the Pay Down, Upskill Act would provide relief for both federal and private student loans. Adults with more than $10,000 in outstanding undergraduate loans may choose where to apply their credit. Qualifying candidates must apply within five years of the act being signed into law.
Workforce Training Gets a Boost
Washington think tank Third Way teamed up with Lamb to compose this bill. Third Way education policy advisor Shelbe Klebs said she and her colleagues began fleshing out this proposal over a year ago amid talks of universal debt forgiveness.
"We felt that [blanket debt forgiveness] didn't really capture some of the longer-term issues. It wasn't really future-looking," Klebs told BestColleges. "We wanted to do something that would help borrowers now, but also aid workforce development."
Klebs said the bill was crafted with bipartisanship in mind, but the legislation may still face trouble making its way through Congress.
One one hand, conservative lawmakers opposed to federal spending could attempt to block the bill. Klebs said Third Way has not yet calculated an estimated cost for the Pay Down, Upskill program. Likewise, Lamb's statement did not include a potential price tag.
On the other hand, some progressives may feel the bill doesn't go far enough, Klebs said.
Progressives have been demanding President Joe Biden use executive order to provide student debt relief since he was sworn in. Last February, Senate Majority Leader Chuck Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), and Rep. Ayanna Pressley (D-Mass.) called on President Joe Biden to cancel up to $50,000 in student loan debt for Federal student loan borrowers. Democratic Rep. Ilhan Omar of Minnesota, meanwhile, penned a letter earlier this month to Biden and Secretary of Education Miguel Cardona urging the administration to make public a memo from the Department of Education detailing the administration’s authority to cancel student debt through administrative action. Nearly two dozen other representatives cosigned the letter.
It’s Time to Deal With Student Debt
Klebs said she sees the proposed bill as a bipartisan compromise, though bipartisanship wasn't the primary goal of this act.
Klebs said now is an opportune time to push federal legislation addressing student loan debt. Passing Biden's Build Back Better proposal is the top priority, she said, but chatter surrounding the student debt crisis has grown so loud that the federal government must address the issue soon.
"The moment is right," Klebs said. "[Officials] are facing more pressure than they ever have to do something."
She added that The Pay Down, Upskill Act may also encourage more Americans to pursue postsecondary education.
Feature Image: RichVintage / E+ / Getty Images
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