Higher Ed Policy Roundup: Vol. 5 - Issue 26
This Week in Washington
This Week in Washington
The New Hampshire Higher Education Assistance Foundation (NHHEAF), a federal student loan servicer responsible for managing nearly 1.3 million accounts, announced that it would not renew its contract with the Education Department (ED) beyond December 31, 2021. In a statement released on Monday, NHHEAF said that it plans to focus on public service efforts in New Hampshire and private student loan products. Recall that the Pennsylvania Higher Education Assistance Agency (PHEAA), responsible for servicing close to 9 million federal student loans, also announced that it would not be extending its contract with ED beyond December 14, 2021. There is no word from ED on who will be responsible for the reassigned loans.
On Tuesday, the Government Accountability Office (GAO) released a report examining various federal programs and issues related to how they responded to the pandemic. The report found that ED erroneously awarded 5.5 percent of schools with amounts that exceeded what was allocated to them from the Higher Education Emergency Relief Fund (HEERF) established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. GAO also noted that these errors were due to ineffective procedures that would have identified the incorrect amounts. The report recommended that ED design and implement procedures for regularly conducting quality assurance reviews of obligated amounts.
The Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy announced plans to hold a hearing titled “Protecting Student Loan Borrowers and the Economy in Upcoming Transitions.” The hearing will take place on July 27 at 3pm and can be watched here.
News You Can Use
PHEAA’s departure from federal servicing could make the student loan system even tougher to navigate for certain borrows.
U.S. Court of Appeals for the Second Circuit rules that some private student loans are dischargeable in bankruptcy.
Throughout the pandemic, ED has continued to contest requests for bankruptcy discharges from struggling borrowers.
The following bills have been recently introduced for consideration by the 117th Congress (2021-2022):
H.R. 4600 – Responsible Borrowing Act [Rep. Glenn Grothman (R-WI-6)] would allow institutions of higher education to limit the amount of a federal loan that an enrolled student may borrow.