This Week In Washington
On Monday, President Trump released his Fiscal Year (FY) 2019 budget proposal, which seeks to eliminate the Public Service Loan Forgiveness (PSLF) program and increase the amount paid under Income-Driven Repayment (IDR) plans. AccessLex Institute issued a statement opposing the budget policies that would increase costs for students.
This year’s budget proposal also outlined other policies the administration would like included in a reauthorization of the Higher Education Act (HEA), including an institutional risk-sharing framework and auto-enrollment of severely delinquent borrowers in IDR plans. Read a brief summary of the budget here.
Recall the House education committee passed its version of HEA reauthorization, known as the PROSPER Act, late last year. In tandem with the Congressional Budget Office (CBO) scoring the bill last week, the committee released its report on the bill. The report includes the bill text, as well as some explanation for some of the policies outlined in the bill and Democrats’ views about the legislation. This was the final step by committee before the bill goes to the entire House for a vote, which is expected to occur within the next few months. AccessLex Institute opposes several provisions in the PROSPER Act and has called for substantial improvements to be made.
Meanwhile, the Senate is working on its own version of HEA reauthorization. As we have reported, the Senate has been conducting hearings over the last several months about various higher education topics. The Chairman and Ranking Member on the education committee, Lamar Alexander (R-TN) and Patty Murray (D-WA), are seeking comments or suggestions from you about what the next HEA should include. You can email your ideas to HigherEducation2018@help.senate.gov. Comments are due by February 23, 2018.
This week, the negotiating committee tasked with revamping the borrower defense to repayment regulations concluded its work without reaching consensus on how to rewrite the rules. This means that the Department of Education (ED) is free to draft its own proposed rule. ED is expected to release its proposed rule and solicit public comments on the draft in May. Meanwhile, Secretary of Education Betsy DeVos once again delayed implementation of the borrower defense rules crafted by the Obama Administration, thus giving this administration additional time to create its own rule.
News You Can Use
Christopher P. Chapman, President and Chief Executive Officer of AccessLex Institute, explains how a proposed cap on federal student loan borrowing could negatively impact historically underrepresented students pursuing graduate and professional education.
The higher education community raises the alarm about how the proposed cuts to federal financial aid for graduate students “will cut off access” to individuals from diverse backgrounds.
A study conducted by LendEDU and the National Association of Student Financial Aid Administrators found that the majority of graduate students did not understand what loan origination fees were and half of respondents felt “cheated” by the federal government upon learning how much money it has made on these fees.
The New York Federal Reserve’s latest report on household debt and credit reveals that when the economy improved after the 2008 recession, delinquencies on credit card debt, mortgages and auto loans declined, but the federal student loan delinquency rate continued to rise.
New analysis on default rates from Robert Kelchen, Assistant Professor at Seton Hall University, finds that even after controlling for other factors, black borrowers were 150 percent more likely to default on their federal student loans than white borrowers.
No student aid-related bills were introduced this week for consideration by the 115th Congress.