This Week in Washington
The Office of Federal Student Aid (FSA) at the U.S. Department of Education released its most recent quarterly update on the federal student loan portfolio. Cumulative outstanding federal student loans now stand at $1.45 trillion, with Grad PLUS totaling $71.3 billion (or less than 5 percent of the portfolio). Enrollment in income-driven repayment plans increased 10 percent year-over-year, while delinquencies and new defaults continue to slow their increases. Finally, as of the beginning of 2019, 338 unique borrowers have had $21.1 million in loans forgiven under the Public Service Loan Forgiveness (PSLF) program.
On the campaign trail, Senator Elizabeth Warren laid out her first major higher education proposal that would forgive almost all student loan debt for most borrowers. Her plan would cancel up to $50,000 in student loan debt based on household income, with no forgiveness available for those earning $250,000 or more. Some private loans would be eligible, and the forgiven debt would not be taxable as income. The plan is estimated to affect 42 million Americans and would cost around $640 billon.
As we have reported in the past, the 2020 presidential election complicates Congress’ attempt to reauthorize the Higher Education Act (HEA) because candidates and their supporters may have little incentive to support a bill that does not address candidates’ priorities. We will keep you abreast of new HEA developments.
News You Can Use
The Wall Street Journal reports on states’ attempts to fill workforce gaps by attracting credentialed graduates with student loan forgiveness.
Newly published research finds “little consistent evidence” that the introduction of the Grad PLUS loan program impacted business and medical school tuition prices and students’ debt burdens. (Note: This study was supported through a grant by AccessLex Institute and the Association for Institutional Research.)
Senator Tim Kaine (D-VA) and Randi Weingarten, President of the American Federation of Teachers, published a joint op-ed advocating for changes to the PSLF program. (Note: AccessLex Institute has written a letter of support for the bill mentioned in the op-ed.)
There are no recently introduced bills for consideration by the 116th Congress (2019-2020), as both Chambers of Congress are on recess until April 29.