Skip to main content

Congressman Dan Kildee Aims to Address Student Loan Debt, Make College More Affordable for Michigan’s Hardworking Students and Families

August 13, 2015

Kildee's New Legislative Package Provides Millions in Tax Relief, Ends Unfair Lending Practices for Student Loans

Congressman Dan Kildee (MI-05) today unveiled new legislation to address the ongoing student loan debt crisis and make college more affordable for Michigan students and families. The announcement of the three-bill package took place at Baker College, where Congressman Kildee also hosted a roundtable discussion with various presidents of Michigan's independent non-profit colleges and universities.

Student loan debt has soared in recent years, and there are now over 40 million federal and private student loan borrowers who collectively owe $1.2 trillion in student loans. The average student has $28,400 of loan debt, and total student loan debt in the U.S. has now surpassed credit card and auto loan debt totals.

"Too many hardworking students and families in Michigan are held back by the increasing burden of student loan debt," Congressman Kildee said. "The soaring cost of college is crushing students and forcing students to delay other investments, including buying a car, owning a home or saving for retirement. This doesn't just have a negative impact on individual families – it also harms our larger economy as a whole. My new package of bills will help to tackle the issues of soaring student debt head-on so that we can make college more affordable and ensure that our future generations can unleash their full potential in the new economy."

Congressman Kildee's new legislation seeks to decrease the burden of student loans on hardworking students and their families. His new bills would provide tax relief and increase the value of scholarships and Pell Grants by making them fully exempt from income taxes, stop unfair practices by private lenders, and allow bankrupt students to discharge their debt. A summary of the three bills are below:

  • Scholarship Tax Relief for Students Act: This bill would fully exempt Pell Grants and scholarships from income taxes, giving back $200 million annually to students and their families to help pay for college. Currently, taxes on scholarships significantly decrease the value of financial aid.
  • Student Debt Repayment Fairness Act: This bill would end unfair lending practices by private lenders. Currently, if a student takes out a loan from a private lender and their cosigner dies, the lender can automatically treat the student as in default and require them to immediately pay back the entire loan amount. The Student Debt Repayment Fairness Act would prevent this practice as long as students are up to date on their payments.
  • Student Loan Bankruptcy Parity Act: This bill would finally permit student loans to be discharged in bankruptcy proceedings, just like mortgages, credit-card balances and auto loans. Current federal law prohibits student loans from being discharged in bankruptcy, except in rare circumstances.

Congressman Kildee announced the new bills today alongside Ms. Wen Hemingway, President, Baker College of Flint, and Pauline Helmling, Bay City Public Schools Board of Education President, who had previously contacted the Congressman's office with ideas to address student loan debt that are reflected in the legislation. The three bills will be introduced on September 8, 2015, the next day that the U.S. House of Representatives will be in session.

Issues:Education