Last week, Rep. Pete Aguilar re-introduced his bill, the Grace Period Alleviation (GPA) Act, which helps recent graduates reduce and manage their federal student loan debt. Rep. Aguilar previously introduced the bill in the 114^th Congress.

“I know what it’s like to struggle to make ends meet to pay for college,” said Rep. Aguilar. He continued, “Had it not been for federal student aid, I wouldn’t have been able to afford my college education. With student debt exceeding one trillion dollars in the United States, we need to do everything we can to ease the burden on families and students. Limiting a college education to only those who can afford it stands in contrast to our national ideals and priorities, and prevents us from helping people realize their full potential. Inland Empire students deserve a fair shot and that’s exactly what this bill helps us do.”

“Congressman Aguilar has shown time and time again his ongoing commitment and support of college students and recent college graduates. We appreciate his efforts to make quality higher education affordable for all,” said Cal State San Bernardino President Tomás D. Morales.

Angel Vasquez, a student at Cal State San Bernardino, expressed appreciation for Rep. Aguilar’s efforts to confront student loan debt, stating, “I worry about my student loans a lot. College affordability is a big concern in my family so I’m grateful that Rep. Aguilar is working hard to address this issue for students like me in our community.”

The GPA Act makes two changes to the Stafford loan program, affecting Inland Empire students and many more across the country.

First, the bill eliminates the interest payments during the grace period for students with Subsidized Stafford loans that were disbursed between 2012 and 2014. This cohort of borrowers, who qualified for these loans based on their financial need, are currently forced to pay interest that other Subsidized Stafford loan borrowers do not and this bill reverses that unfair policy.

Second, the GPA Act gives students with both Subsidized and Unsubsidized Stafford loans the option to extend their six-month grace period to twelve months.  Students with Unsubsidized Stafford loans would pay interest during the entire grace period, while students with Subsidized Stafford loans would only be required to pay interest during the optional, extended six-month grace period.  This change gives borrowers the flexibility to postpone the student loan payment burden for a short time longer while they pursue career options, intern for work experience, or work to plan their next steps in life.

Federal Stafford loans are available to students seeking financial aid, regardless of income or need. Unsubsidized Stafford loans have a six-month grace period before payments on the loan are due after graduation, during which time interest is accrued because they are not need-based. Subsidized Stafford loans, which are need-based, do not accrue interest during the six-month grace period.  Other federal student loans, like the Perkins loan, have longer grace periods.  In 2011, as a one-time fix, Congress imposed a policy that required students who took out Subsidized Stafford loans between 2012 and 2014 to pay interest during their grace periods to offset the lack of funding for Pell grants. Between July 1, 2012 and July 1, 2014, there were about 14 million undergraduate Subsidized Stafford loan recipients. There were over 31 million undergraduate Subsidized Stafford loans disbursed during this same period. Many students from the Classes of 2016 and 2017 with these loans have already entered the repayment period, and other graduates with these loans will join them over the next several years. 

By eliminating interest payments during the grace period for students with subsidized loans, allowing students to refinance their loans under certain circumstances and extending the loan repayment grace period, Rep. Aguilar’s efforts give graduates the assistance and flexibility they need to manage their loans and plan their next steps in life as they begin their careers. Last year, the Southern California News Group Editorial board praised the bill, calling it a “sensible easing of college debt load.” The editorial can be read online here.