Student loan allowance calculation for award year 2027–2028 and each succeeding award year

(a) In general Section 475(c) of the Higher Education Act of 1965 (20 U.S.C. 1087oo(c)), as amended by title VII of division FF of the FAFSA Simplification Act (Public Law 116–260), is further amended— (1) in paragraph (1)— (A) by striking and at the end of subparagraph (C); (B) by striking the period at the end of subparagraph (D) and inserting; and; and (C) by adding at the end the following: (E) beginning with award year 2027–2028, a student loan allowance, determined in accordance with paragraph (5).; and (2) by adding at the end the following: (5) Student loan allowance (A) In general The student loan allowance is equal to the lesser of $4,000 or 15 percent of the single parent’s outstanding student loan debt or married parents’ combined outstanding student loan debt (as adjusted under section 478(i)). (B) Exceptions A single parent with an adjusted gross income of more than $200,000 (as adjusted under section 478(i)), or married parents with a combined adjusted gross income of more than $400,000 (as so adjusted), may not receive a student loan allowance under this paragraph. (C) Definitions In this paragraph: (i) Federal student loan The term Federal student loan means any loan made, insured, or guaranteed under this title. (ii) Outstanding student loan debt The term outstanding student loan debt, used with respect to a parent, means the total amount of principal, interest, and fees owed by such parent, as of the date of determination of the allowance under this paragraph, on Federal student loans.. (b) Adjustment Section 478 of the Higher Education Act of 1965 (20 U.S.C. 1087rr), as amended by title VII of division FF of the FAFSA Simplification Act (Public Law 116–260), is further amended by adding at the end the following: (i) Student loan expense allowance For award year 2028–2029 and each succeeding award year, the Secretary shall publish in the Federal Register a revised table of student loan allowances for the purpose of section 475(c)(5). Such revised table shall be developed by increasing the dollar amounts specified in subparagraphs (A) and (B) of section 475(c)(5) by a percentage equal to the percentage increase in the Consumer Price Index, as defined in subsection (f), between April 2022 and the April in the year prior to the beginning of the award year and rounding the result to the nearest $10..