H.R. 1330 The Student Loan Fairness Act – What it is and what it means for you

Michael Lux Blog, Lower Payments, News, Student Loans 1 Comment

Here at the Student Loan Sherpa our focus is about helping people manage there student loan debt in the most painless way possible. Every once in a while, news breaks that could have an impact on those dealing with student loan debt. Today I learned of once such bit of news.

Karen Bass (D) of the California-37th recently introduced legislation (House Resolution 1330 – The Student Loan Fairness Act) that would dramatically change student loan repayment, both for public loans and private loans. Her fundamental proposal calls for a 10-10 repayment plan. Under this plan, borrowers of Federal Student Loans would be expected to pay ten percent of their income for ten years. At the completion of those ten years, the debt is forgiven. Its worth noting that there would be no public service requirement under this plan. Additionally, she calls for the public service forgiveness to be shortened from its current ten years down to five.

Bass’s proposed legislation addresses private loan debt in a couple of ways. First, it would limit the interest rate on all student loans, public and private, to 3.4%. Secondly, it “allow[s] existing borrowers whose educational loan debt exceeds their income to convert their private loan debt into federal Direct Loans.” Should this legislation pass it would offer a tremendous amount of relief for individuals who are paying large amounts in private loans.

Finally, according to Bass’s website, the last component of the bill “promotes financial responsibility in higher education and incentivizes students to be mindful of educational costs and for colleges and universities to control tuition increases.” However, the specifics of this last component have not been explained on her website.

Though I am far from an expert on legislation (unless repeated watchings of the Schoolhouse Rock – How a Bill Becomes a Law makes me an expert), this legislation likely doesn’t stand a chance. It is currently in committee, and given how conservative the House is right now, it will probably never see a vote. Additionally, private loan lenders are currently making a fortune on student loans, so their considerable lobbying power would represent an enormous obstacle.

Opponents of the bill will likely argue that the country cannot afford to offer this much debt relief in the current economy and that this is the sort of legislation that promotes irresponsible borrowing while penalizing those who have sacrificed to pay of their student loans.

If you are interested in further reading about the legislation:
Bass’s website and official description
Current Student Loan Forgiveness Rules/Law
– Curent Repayment Plans Available

Please leave a comment if you have any thoughts on the legislation or anything questions about what it might mean for you.


  • Edna Ann

    Ms. Bass may find it useful to do some further research. The majority of higher educational institutions are public institutions; however, state legislatures have slowly reduced their support of higher education over the years. In the state where I work, state support for higher education has fallen from roughly 75% to just over 33% of our budget in just 10 years.

    It does cost a given amount of money to run a college or university. Therefore, I would like to pose a question: How does Ms. Bass propose that public colleges and universities hold down their tuition costs, given the fact that state legislatures are reducing public support? The taxpayers must either foot the bill for running the colleges or universities or the users (students and parents) must foot the bill. My point: If one must point a finger, point it at those who have caused the problem.