State-Based Education Loan Awareness Act
Latest action (30 Jul 2026): Committee on Health, Education, Labor, and Pensions. Ordered to be reported with an amendment in the nature of a substitute favorably.
What this bill does
S. 4097, the State-Based Education Loan Awareness Act, would amend the Higher Education Act of 1965 to exempt certain state-based education loan programs from federal "preferred lender arrangement" rules that colleges must follow when working with private lenders. To qualify for this exemption, a state loan program must be run by a state agency, authority, or nonprofit; make loans not backed by the federal government; be authorized or approved under state law; offer at least one loan with rates and fees as favorable as federal Direct PLUS loans; and be available only to borrowers whom a college has informed about the option to first use federal loans and about federal loan terms, repayment plans, forgiveness options, and other benefits. The bill also requires the Government Accountability Office, within two years of enactment, to report to relevant congressional committees on trends in federal, state-based, institutional, and private student borrowing, including borrowing amounts, availability of state loan programs, interest-rate differences, combined borrowing, and borrower outcomes such as repayment, delinquency, and default rates.
The bill primarily affects colleges and universities, state loan agencies and nonprofits that administer education loan programs, and student and parent borrowers, by clarifying how state loan programs interact with federal preferred-lender disclosure requirements and by generating federal data on borrowing trends.
Introduced by Senator Murkowski with bipartisan cosponsors, the bill was referred to the Senate Committee on Health, Education, Labor, and Pensions. On July 30, 2026, the committee ordered it reported with an amendment in the nature of a substitute, and it was formally reported on August 4, 2026 (Calendar No. 539). It would next require action by the full Senate, followed by House consideration, before it could be sent to the President.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
State-Based Education Loan Awareness Act
This bill excludes certain arrangements or agreements regarding education loans from the definition of a preferred lender arrangement.
A preferred lender arrangement is an arrangement or agreement between a lender and an institution of higher education (IHE) that receives federal funding or assistance (1) under which a lender issues education loans to students attending the IHE; and (2) that relates to the IHE recommending, promoting, or endorsing the education loan products of the lender.
The bill provides that arrangements or agreements made under a state-based education loan program do not meet the definition of a preferred lender agreement for purposes of certain required disclosures to student borrowers.
Timeline
30 Jul 2026
Committee on Health, Education, Labor, and Pensions. Ordered to be reported with an amendment in the nature of a substitute favorably.
Common questions
- What does S. 4097 do?
- S. 4097, the State-Based Education Loan Awareness Act, would amend the Higher Education Act of 1965 to exempt certain state-based education loan programs from federal "preferred lender arrangement" rules that colleges must follow when working with private lenders. To qualify for this exemption, a state loan program must be run by a state agency, authority, or nonprofit; make loans not backed by the federal government; be authorized or approved under state law; offer at least one loan with rates and fees as favorable as federal Direct PLUS loans; and be available only to borrowers whom a college has informed about the option to first use federal loans and about federal loan terms, repayment plans, forgiveness options, and other benefits. The bill also requires the Government Accountability Office, within two years of enactment, to report to relevant congressional committees on trends in federal, state-based, institutional, and private student borrowing, including borrowing amounts, availability of state loan programs, interest-rate differences, combined borrowing, and borrower outcomes such as repayment, delinquency, and default rates. The bill primarily affects colleges and universities, state loan agencies and nonprofits that administer education loan programs, and student and parent borrowers, by clarifying how state loan programs interact with federal preferred-lender disclosure requirements and by generating federal data on borrowing trends. Introduced by Senator Murkowski with bipartisan cosponsors, the bill was referred to the Senate Committee on Health, Education, Labor, and Pensions. On July 30, 2026, the committee ordered it reported with an amendment in the nature of a substitute, and it was formally reported on August 4, 2026 (Calendar No. 539). It would next require action by the full Senate, followed by House consideration, before it could be sent to the President.
- Has S. 4097 become law?
- Not yet. As of 30 Jul 2026, S. 4097 is ordered reported.
- Who sponsored S. 4097?
- S. 4097 was sponsored by Sen. Lisa Murkowski [R-AK] (Republican-AK), with 6 cosponsors.
- What's the latest action on S. 4097?
- Committee on Health, Education, Labor, and Pensions. Ordered to be reported with an amendment in the nature of a substitute favorably. (30 Jul 2026).
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