Higher Ed Policy Roundup: Vol. 5 - Issue 21

Late last week, the Education Department (ED) notified Congress that, due to technological limitations, it would be delayed in rolling out changes to the Free Application for Federal Student Aid (FAFSA) that were mandated by both the Consolidated Appropriations Act of 2021 and the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act. The changes include a new simplified FAFSA form for the 2023-24 school year, and data-sharing between the Internal Revenue Service and ED that would result in fewer FAFSA questions and automatic recertification while enrolled in an income-based repayment program. There is no word on when the data-sharing will begin, but ED plans to have a simplified FAFSA form ready for the 2024-25 school year.

On Monday, the Office of Federal Student Aid released two new sets of quarterly portfolio reports with information about federal student aid programs as of December 31, 2020 and March 31, 2021. The reports found that:

• The outstanding federal student loan portfolio is $1.59 trillion.
• Approximately 500,000 Direct Loan borrowers opted out of the payment pause and were in repayment status as of March 31, 2021.
• Enrollment in Income-Driven Repayment plans is up 3 percent from March 2020.
• Approximately 3,000 borrowers have received TEPSLF discharges totaling $130 million.
• Since the release of the new combined Certification and Application form that covers both PSLF and TEPSLF, more than 391,000 applications from approximately 322,000 borrowers were submitted.

Older Americans are on the front line of the student debt crisis.

Tens of thousands of public servants face delays accessing student-loan relief.

Three recent Senate bills could help borrowers better understand the cost of college.

The following bills have been recently introduced for consideration by the 117th Congress (2021-2022):

S. 2081 – Pell Grant Preservation and Expansion Act [Sen. Mazie Hirono (D-HI)] would double the maximum Pell Grant award, index the award to inflation, increase the lifetime award threshold for students from 12 semesters to 18 semesters, and expand eligibility to Dreamers. A companion bill, H.R. 3946, was introduced in the House by Rep. Mark Pocan (D-WI-2).

H.R. 3861 – Making FHA Work for Borrowers with Student Debt Act [Rep. Gregory Meeks (D-NY-5)] would ensure that enrollment in an income-driven repayment plan is fairly considered when the Federal Housing Administration (FHA) calculates the debt burden of a student borrower applying for a mortgage through FHA’s insurance program.