Background
H.R. 1338 (Formerly H.R. 2505). – The simplest bill.
The stated purpose of H.R. 1338 is to amend the Higher Education Act to permit refinancing of student consolidation loans, to increase Pell Grant maximum awards, and for other purposes.
Section 1 – Title – College Loan Assistance Act of 2005.
Section 2 – This section removes the prohibition against refinancing in the Higher Education Act by changing the definition of "eligible borrower." It strikes the provision, and all references to that provision, which states that a person's status as an eligible borrower terminates upon receipt of a consolidation loan. This section also reduces the cap on the interest rate of consolidation loans after July 1, 2006 from 8.25% to 6.8%.
Section 3 – This section increases the Pell Grant maximum to $7000 for 2006-2007 and the 4 succeeding academic years.
Section 4 – This section eliminates origination fees for Federal Family Education Loans and Federal Direct Loans.
H.R. 1338 does not specifically deal with PLUS loans, and since the consolidation interest rates and PLUS interest rates are separate, I don't know that this bill would apply to PLUS loans. However, it leaves room for PLUS changes later, as it doesn't expressly exclude them. It also helps current students by the grant increase and fee elimination, which refutes some arguments that changing the student loan consolidation rules would hurt current students.