AID Act

HR 7232, the AID Act, creates a new student loan allowance for parents with federal student debt to reduce their reported income for financial aid calculations. It applies to single parents with debt under $200,000 adjusted gross income (AGI) or married parents with combined debt under $400,000 AGI, capping the allowance at $4,000 or 15% of their total federal student loan balance. The allowance, effective for the 2027-2028 academic year and adjusted annually using the Consumer Price Index, subtracts from parents' income when calculating aid eligibility. This directly affects parents seeking federal student aid for dependent children, specifically modifying how their student debt is factored into aid calculations under the Higher Education Act.