This Week In Washington
The House Committee on Appropriations held a markup and passed its education spending bill on Wednesday after being delayed a few weeks. The House spending bill contains a modest increase in funding to the U.S. Department of Education (ED), but does not include an extension of the Temporary Expanded PSLF program, as the Senate’s version did. The House bill report recommends that ED “allocate new defaulted student loan borrower accounts to private collection agencies,” based on their performance compared to other debt collectors if they use a common performance metric. This is in contrast to the Senate bill report, which encourages ED to extend its contracts with current collection agencies until ED transitions to the new “NextGen” servicing system. ED has subsequently taken steps to adhere to the Senate’s recommendations. Finally, an amendment was adopted by voice vote that would postpone monthly payments for federal student loan borrowers while they are receiving cancer treatments for up to six months.
Although completed in late June, the Consumer Financial Protection Bureau (CFPB) released a Data Point report this week entitled: Final Student Loan Payments and Broader Household Borrowing. The report examines how various borrowers make their final few student loan payments and transition out of their student loan debt, along with how changing some student loan policies might affect those payments. The main conclusion was that “most borrowers approaching their final student loan payments prefer to, and are able to, pay off the loans in full with a single large payment,” thus freeing them up to start paying off other debts simultaneously or shortly thereafter.
In its lawsuit against Navient, the CFPB filed a letter with the court stating that ED has not been forthcoming with documents and information regarding Navient. In the interim, the CFPB is asking the court to order Navient to produce the information it needs. Navient now has a few days to respond to the CFPB’s letter. Despite being in question after acting director Mick Mulvaney’s recent staffing and office shakeup, this lawsuit is moving forward.
News You Can Use
The Center for American Progress (CAP) released a report about accurately calculating student loan repayment rates and the benefits and drawbacks of using loan repayment rates as an accountability metric for institutions of higher education.
CAP released another study indicating that higher education enrollment gaps still exist between wealthy and non-wealthy students.
No student-aid related bills were introduced recently in Congress.