This Week In Washington
On Tuesday, a subcommittee of the House Appropriations committee marked up the fiscal year 2020 education spending bill. The legislation would increase funding for the U.S. Department of Education (ED) by $4.4 billion over last year’s appropriation. The bill adds another $350 million to the fund dedicated for the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program, which provides loan forgiveness to those who were in an ineligible repayment plan but otherwise qualified for PSLF, bringing the total to $1.05 billion available. The spending legislation continues to set strict guidelines for ED’s solicitation and utilization of student loan servicers, including allocating loans to servicers based on the servicers’ performance and allowing borrowers who consolidate their loans to choose which servicer they want. Watch a replay of the markup here.
Fresh on the heels of last week’s data update, ED’s Office of Federal Student Aid released its first congressionally-mandated biannual update on the Public Service Loan Forgiveness (PSLF) program and TEPSLF. This report, as prescribed by Congress, outlines more detail about who is and who is not receiving forgiveness and reasons why borrowers may have been denied. As of March 31, 2019, 518 unique borrowers had a total of $30.7 million discharged under PSLF, and 442 TEPSLF applications were approved, discharging $17.6 million. Of borrowers who had their PSLF applications approved, about 75 percent were working in government and the other 25 percent were in 501(c)(3) non-profits. The report also revealed that the most common reason for ED rejecting a PSLF application was that the borrower had not made the requisite 120 qualifying payments before applying. Although Congress mandated the report to be delivered twice a year, ED has indicated they plan on releasing data quarterly.
According to the Wall Street Journal (subscription required), ED has retained the consulting and analytics firm McKinsey & Company to “estimate potential losses in the U.S. government’s $1.45 trillion student-loan portfolio, and [to weigh] selling all or portions of the debt to private investors.” Specifically, the firm was hired to “project how much student-loan borrowers will repay, with interest, in the coming years and decades.” The administration believes the federal student loan portfolio will be profitable over time, but still wants “top economic advisers in the White House [to study] ways to improve the [portfolio’s] finances.”
News You Can Use
The American Bar Association released new employment data on the class of 2018, which shows that, within 10 months from graduation, 78.6 percent of graduates had secured full-time, long-term employment in bar passage required or J.D. advantage jobs.
U.S. News & World Report released an open letter to the legal education community discussing its proposal to evaluate “scholarly impact” at law schools and the resources it may draw upon to develop a methodology and ranking system.
According to a new national POLITICO/Morning Consult poll, two-thirds of Americans say student loan debt is a “threat to the economy” and 80 percent considered the amount of Americans’ student loan debt to be a problem.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S.1248 – [Sen. Jeff Merkley (D-OR) and Sen. Ron Wyden (D-OR)] would exclude the discharge of certain federal student loans from the calculation of gross income.