A hidden tax on federal student loans would be eliminated under bicameral legislation sponsored this week by U.S. Rep. Lloyd Smucker (R-PA).
“Students and parents should fully understand the terms and costs associated with borrowing for their education,” Rep. Smucker said. “Unfortunately, federal loan programs have hidden fees which negatively impact students.”
Specifically, the Student Loan Tax Elimination Act, H.R. 1842, would amend the Higher Education Act of 1965 to eliminate origination fees on federal direct loans, according to the congressional record bill summary.
“Loan origination fees are a hidden tax, which ultimately inflate costs for students,” said Rep. Smucker. “Eliminating this fee would be a step in the direction of lowering the cost of higher education for students across the nation.”
H.R. 1842 is companion legislation to the same-named, bipartisan S. 1004, which U.S. Sen. Mike Braun (R-IN) sponsored on March 28 alongside seven original cosponsors, including U.S. Sen. Kyrsten Sinema (I-AZ).
“I appreciate Sen. Braun’s leadership for introducing this legislation in the Senate and I look forward to advancing companion legislation in the House,” said Rep. Smucker.