Blog Home

Cambridge, MA, USA September 10, 2017: The historic architecture of Cambridge in Massachusetts, USA showcasing the famous Harvard University Institution with lots of international students and locals passing by.
Cambridge, MA, USA September 10, 2017: The historic architecture of Cambridge in Massachusetts, USA showcasing the famous Harvard University Institution with lots of international students and locals passing by.
Policy and Advocacy Legislation Student Loans Letter to Legislator
Policy and Advocacy Legislation Student Loans Letter to Legislator

AccessLex Institute Supports Senate Companion Bill That Would Provide State and Nonprofit Organizations With an Increased Ability to Issue Low-Cost Private Loans

The Honorable Mike Crapo
Chairman
Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Ron Wyden
Ranking Member
Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, D.C. 20510

Dear Chairman Crapo and Ranking Member Wyden:

AccessLex Institute® is pleased to offer its support for S. 3761, legislation which would exempt Qualified Student Loan Bonds (QSLBs) from the private activity bond volume cap and the Alternative Minimum Tax (AMT). Introduced on February 3, 2026 by Senator Chuck Grassley (R-IA), S. 3761 would provide state and nonprofit organizations with an increased ability to issue low-cost private loans to students and families seeking to fill the gap between federal student aid and the cost of higher education.

AccessLex Institute, in partnership with its nearly 200 nonprofit and state-affiliated ABA-approved member law schools, has been committed to improving access to legal education and to maximizing the affordability and value of a law degree since 1983. The AccessLex Center for Legal Education Excellence® advocates for policies that make legal education work better for students and society alike and conducts research on the most critical issues facing legal education today.

For decades, Congress has authorized state and nonprofit organizations to issue tax‑exempt private activity bonds to support low-cost private education lending. QSLBs, with their competitive interest rates and low, and in some cases no, origination fees, provide an affordable alternative to students who are already struggling to figure out a financing option. However, the Internal Revenue Code substantially limits the amount of tax-exempt private activity bonds eligible state and nonprofit lenders may issue to fund student loans each year. These limits have become even more consequential following the enactment of the One Big Beautiful Bill Act (OBBBA) which eliminates the Grad PLUS Loan Program and reduces the amount of federal loans that students may borrow annually to $20,500 (for graduate degree programs) and $50,000 (for professional degree programs), when many programs and the associated cost of living expenses significantly exceed this limit.

Moreover, since the cap is fixed and does not account for normal price inflation, available federal loans are expected to cover a shrinking amount of the cost of attendance over time. As this gap widens, eligible state and nonprofit lenders will become increasingly important in helping students affordably bridge that shortfall. By removing QSLBs from the private activity volume cap requirements, S. 3761 would unlock a substantial source of stable, low‑cost private capital to support building the educational capital of our country’s citizenry, benefitting society as a whole. At the individual level, this means that more students can remain enrolled, complete their degrees, and manage repayment with less financial strain. Further, at a time when students and their families are struggling to fill the gaps between a reduced federal investment in higher education and rising tuition costs, exempting QSLBs from the private activity bond volume cap and the AMT could be the difference between whether students can pursue and complete their degree at all.

Thank you for your time and attention to this matter. If you have any questions, please do not hesitate to contact me at [email protected] or Nancy Conneely, Vice President of Policy, at [email protected].

Sincerely,
Christopher P. Chapman
President and Chief Executive Officer
AccessLex Institute®

Back to Results