This Week In Washington
On Tuesday, chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), Lamar Alexander (R-TN), introduced legislation that would simplify the Free Application for Federal Student Aid (FAFSA), consolidate federal student loan repayment plans and allow borrowers with no income to defer their payments. The Senator told reporters on Thursday that the measure would be included in the next Republican lead COVID-19 relief bill being negotiated in the Senate. If passed, the proposal would reduce the number of questions on the FAFSA from about 108 to not more than to 33 and consolidate the nine federal loan repayment options down to two. a standard repayment plan and an income-based repayment plan. The proposal is estimated to save $10 billion over 10 years.
The Office of Federal Student Aid (FSA) issued guidance clarifying how the Department of Education (ED) will deal with increased use of Professional Judgement during COVID-19. The new guidance makes clear that ED “will not negatively view increased use of professional judgment or use it as a selection criterion for a program compliance review.”
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S. 4237 – Student Loan Fairness Act [Sen. Jack Reed (D-RI)] would extend student borrower relief contained in the CARES Act to cover all federally-held loans, including Perkins and FFELP loans. Provisions include freezing interest accrual and repayment requirements, temporally halting potential wage garnishments and other types of involuntary collection through September 30, 2020.
H.R. 7655 – COVID-19 Student Loan Relief Act [Rep. Mary Gay Scanlon (D-PA-5)] would allow federal and private student loans to be discharged in bankruptcy for any individual whose income has been negatively impacted by the coronavirus outbreak, or who has had the primary earner in their household die or become permanently harmed by COVID-19.
H.R. 7625 – Ryan Frascone Memorial Student Loan Relief Act [Rep. Rep. Angie Craig (D-MN-2)] would ensure that in the event of a student borrower’s death, the cosigners on a private student loan would be released from any and all obligation.