Sen. Rounds introduces America’s Credit Unions-supported student lending bill

A new guaranteed student loan program that would allow private financial institutions – including credit unions – to issue loans is at the center of the newly introduced Affordable Future Loan Program Act. Sen. Mike Rounds, R-S.D., introduced the America’s Credit Unions-supported student lending bill Wednesday.  It would amend the Higher Education Act of 1965 to add the new program.  

Under the program, private financial institutions would issue student loans, with 98% of the loan guaranteed by the federal government when a student attends an accredited institution.  

Students would not accrue interest while in school, and borrowers would have two repayment options, including an income-driven repayment. The bill establishes a public-private partnership that gives students and their families another option to afford education through a trusted partner, like their local credit union. 

“Choosing a college or trade school is a decision most students look forward to making, but with rising costs and a decrease in available financing, these decisions have become an impossible burden for middle class families. Senator Rounds’ Affordable Future Loan Program Act – legislation that America’s Credit Unions fully supports – brings new life to these important, life-altering decisions,” said America’s Credit Unions President/CEO Jim Nussle. “Whether you are choosing to pursue an undergraduate degree or seeking a trade education, this bill helps close the gap in affordable loan options, sets students up for success, and better ensures their financial well-being.”  

“With guaranteed loans that do not accrue interest while students are in school, the act provides a lifeline to students who struggle to bridge the gap between federal aid and the rising costs of higher education. Senator Rounds’ innovative approach will make higher education attainable for all Americans, preserving the dream of college for future generations,” said Dakota Credit Union Association President/CEO Jeff Olson. “The Affordable Future Loan Program Act, championed by Senator Mike Rounds, offers a crucial solution to the pressing issue of college affordability.   

“By leveraging the private sector to create a sustainable and affordable loan product, this legislation ensures that middle-class families across the country are no longer burdened with long-term debt,” Olson added. 

Nussle and Olson sent a letter of supportto Sen. Rounds, thanking him for the bill's introduction.   

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