PASFAA is a volunteer professional association representing over 300 Pennsylvania educational institutions, lenders, and organizations involved with higher education.  Along with providing professional development to its members and educating the public on financial aid, advocating for access to post-secondary education is a key component of the PASFAA mission.

It is in this spirit of PASFAA advocacy that we have assembled a Government Relations Committee that represents the many financial aid sectors across Pennsylvania.

The members of the PASFAA Government Relations group recommends the following to improve student financial aid:  elimination of Direct Loan Fees; improvements to the Stafford loan program; support for PLUS loans; expansion of Pell grants; and careful efforts to simplify the FAFSA.

Eliminate Direct Loan Origination Fees.

PASFAA supports the elimination of federal student loan origination fees and believes removing these fees is an important step toward improving transparency, affordability, and fairness in the federal student loan process. Under current law, origination fees are deducted from the gross amount of a student’s federal loan before funds are disbursed, reducing the actual amount students receive while still requiring repayment of the full borrowed amount, including the fee. Currently, origination fees are 1.057% for subsidized and unsubsidized federal student loans and 4.228% for PLUS Loans. As a result, students and families often receive less funding than anticipated to cover educational expenses while assuming repayment obligations for funds they never directly received.

Origination fees create unnecessary confusion and financial strain for borrowers already navigating a complex repayment system. Students who graduate, withdraw, or fall below half-time enrollment enter repayment owing both the net disbursed amount and the deducted fee, making it more difficult to understand their true loan balance and cost of borrowing. PASFAA believes these fees impose an unnecessary financial burden without providing a direct benefit to students or families. PASFAA urges Congress to eliminate federal student loan origination fees in order to better align loan disbursements with repayment obligations, improve transparency for borrowers, and reduce unnecessary costs for students and families pursuing higher education.

Increase Parent PLUS Loan Aggregate.

PASFAA is concerned that the new Parent PLUS Loan limits will create significant funding gaps for families during a student’s final year of undergraduate study. Under the proposed structure, families would be limited to borrowing $20,000 annually with a $65,000 aggregate cap. This means a family borrowing the maximum amount each year would reach $60,000 after three years, leaving only $5,000 available for the student’s fourth year. As a result, many families could face unexpected financial hardship at the most critical point in a student’s academic journey, potentially forcing them to seek private loans, exhaust savings, take on additional employment, or jeopardize a student’s ability to complete their degree.

While PASFAA agrees that Parent PLUS Loans should not serve as the primary means of financing a bachelor’s degree, the program remains an essential resource for hundreds of thousands of families nationwide. According to NASFAA, nearly 610,000 parents borrowed Parent PLUS Loans during the 2023–2024 academic year. PASFAA therefore supports a revision to the aggregate borrowing cap to better align with the realities of a traditional four-year degree program. Increasing the aggregate limit from $65,000 to $80,000 would allow families borrowing at or below the proposed $20,000 annual limit to support students through graduation without encountering an unexpected final-year funding shortfall

Fund Federal Pell Grants

The Pell Grant program has long served as one of the federal government’s most important investments in higher education access and socioeconomic mobility for students with exceptional financial need. PASFAA supports recent efforts to expand Pell Grant eligibility, including the FAFSA Simplification Act and the creation of the Workforce Pell Grant program through the One Big Beautiful Bill (OBBB), which broadens access to short-term training programs leading to in-demand careers. In Pennsylvania alone, more than 30% of undergraduate students received a Pell Grant during the 2023–2024 academic year, underscoring the program’s critical role in helping low-income students pursue and complete their educational goals. PASFAA believes students must be able to rely on stable and consistent Pell Grant funding throughout their academic journey.

PASFAA is deeply concerned about the Congressional Budget Office’s projected Pell Grant funding shortfall, which could disrupt full Pell awards as early as the 2028–2029 aid year. While the Department of Education’s Fiscal Year 2027 Budget Request proposes additional funding to address the shortfall, the proposal also eliminates the Federal Supplemental Educational Opportunity Grant (FSEOG), a program that supports more than 1.5 million students annually and provides institutions with flexibility to meet the needs of their highest-need students. PASFAA strongly urges Congress to develop long-term solutions that preserve and strengthen both the Pell Grant and FSEOG programs. Reducing or eliminating either program would disproportionately harm students with the greatest financial need and create additional barriers to college access, affordability, and completion

Expand Definition of a Professional Degree

PASFAA supports federal efforts to clarify and modernize the definition of “professional student” within the Higher Education Act to better reflect the realities of today’s graduate education and workforce needs. Recent federal student loan reforms created differing borrowing caps for graduate and professional students, but current regulatory interpretations exclude many graduate-level programs that require advanced credentials, clinical training, accreditation standards, and professional licensure. As a result, students pursuing careers in fields such as nursing, education, social work, physical therapy, physician assistant studies, and other allied health professions may face borrowing limits that do not align with the true cost of attendance for their programs. PASFAA believes federal financial aid policy should recognize these programs as professional pathways consistent with their academic rigor, workforce demands, and public service importance.

Expanding the definition of professional students would improve equity in access to graduate education, reduce reliance on private lending, and strengthen workforce pipelines in critical sectors facing persistent shortages. Students enrolled in these high-demand programs should have access to federal borrowing limits that support program completion and provide the consumer protections available through federal loan programs. PASFAA believes updating these definitions would promote consistency and transparency in federal financial aid policy while helping institutions recruit and retain students in essential healthcare, education, and public service professions. PASFAA urges Congress to advance policies that expand access to affordable graduate and professional education and ensure federal aid programs reflect the evolving landscape of higher education and workforce preparation.