Higher Ed Policy Roundup: Vol. 5 - Issue 16

On Wednesday, the U.S. Treasury’s 10-year Treasury note auction resulted in an increase in interest rates for federal student loans disbursed on or after July 1, 2021 and before July 1, 2022. The rates are expected to increase from 4.30 percent to 5.28 percent for graduate Direct Unsubsidized Loans and from 5.30 percent to 6.28 percent for Grad PLUS loans. Interest rates on federal student loans have been set annually according to the 10-year Treasury note rate, plus a fixed percentage that differs by loan type (e.g., subsidized Stafford, unsubsidized Stafford, PLUS). The interest rates will be fixed for the life of the loan.

On Tuesday, the U.S. Department of Education released new guidance stating that the third round of Higher Education Emergency Relief Fund (HEERF) grants could be distributed to undocumented students, those enrolled in the Deferred Action for Childhood Arrivals program, and international students. In other words, to be eligible for this round of grants, students no longer need to be Title IV-eligible, as they were for HEERF grants authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

The National Association of Student Financial Aid Administrators released an issue brief on the student loan repayment system, highlighting the status of federally-managed loans, repayment options utilized by borrowers, challenges students face, and steps Congress can take to improve the system.

Credit card balances see 'remarkable' drop while student loan debt keeps rising, despite a payment and interest pause.

Marcelo Suárez-Orozco, chancellor of the University of Massachusetts Boston, and Robert Hildreth, a former International Monetary Fund economist, say a new ‘reverse pension’ system could solve America’s student debt crisis.

There were no relevant student-aid related bills recently introduced for consideration by the 117th Congress (2021-2022).