This Week In Washington
On Monday, President Trump released his fiscal year (FY) 2020 budget proposal. The administration proposed eliminating the Public Service Loan Forgiveness (PSLF) program and increasing the amount paid under Income-Driven Repayment (IDR) plans to 12.5 percent. The budget also seeks to auto-enroll severely delinquent borrowers in IDR plans and implement an institutional risk-sharing framework. AccessLex Institute issued a statement opposing the budget policies that would increase costs for students. Read our brief summary of the budget here.
On Wednesday, the House Education and Labor Committee held a hearing entitled The Cost of College: Student Centered Reforms to Bring Higher Education Within Reach. Members raised several issues they would like to see addressed in a reauthorization of the Higher Education Act (HEA), such as simplifying repayment options, refinancing of student loans and improving financial literacy. This is the first of five hearings the House will hold as it undertakes HEA reauthorization. You can watch a replay of the hearing here.
On Tuesday, the Senate education committee held its first hearing on HEA this Congress, Reauthorizing HEA: Simplifying the FAFSA and Reducing the Burden of Verification. Senators and witnesses generally agreed that reducing complexity and income verification burdens would help all students, particularly low-income students, apply for aid. Several ideas were floated, like students filing FAFSA only once per institution they attend and using IRS data to fill out most questions for students. Chairman Lamar Alexander (R-TN) once again called for reauthorization of HEA to include both FAFSA and IDR simplification, and suggested that if there was agreement on some issues, those could be packaged together and passed, as opposed to a comprehensive bill that may be harder to pass. You can watch a replay of the hearing here.
Last week, the House Education and Labor Committee released a report reaffirming the value of a college degree. The report examines the fiscal benefits to individuals, states and the American economy and determines that college is still worth the cost. Among other findings, the report suggests that the next HEA reauthorization “should expand access, improve affordability, and promote completion for all students.”
News You Can Use
The Center for American Progress released recommendations for improving student loan repayment and servicing for borrowers.
Roll Call reports that 68 members of Congress, or 13 percent, are carrying student debt for themselves or their family members. This is a slight increase from the 10 percent of members in the previous Congress who had student debt.
The Manhattan Institute released a paper on income-share agreements as an option to replace federal student loans and how some educational institutions are currently using them.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S.768 | H.R. 1707 - Bank on Students Emergency Loan Refinancing Act [Sen. Elizabeth Warren (D-MA) et al.| Rep. Joe Courtney (D-CT-2) et al.] would allow eligible borrowers to refinance their federal or private loans to the lower rates offered to new federal borrowers.
S. 720 – CFPB Student Loan Integrity & Transparency Act of 2019 [Senator Tom Udall (D-NM) et al.] would require the U.S. Department of Education and the Consumer Financial Protection Bureau (CFPB) to share information, student loan servicers to work with the CFPB’s Ombudsman, and the Ombudsman’s office to increase its staff.
S. 686 – Strengthening American Communities Act [Sen. Benjamin Cardin (D-MD)] would allow for debt-free undergraduate education for students who commit to public service.
S. 681 | H.R. 1565 – Student Right to Know Before You Go Act [Sen. Ron Wyden (D-OR) et al. | Rep. Duncan Hunter (R-CA-50) et al.] would establish a new and secure higher education data system to make prospective students aware of schools’ graduation rates, graduates’ debt levels and earnings outcomes, and other education and workforce-related measures.
H.R. 1554 – Resident Education Deferred Interest Act [Rep. Brian Babin (R-TX-36) et al.] would allow borrowers that serve in a medical or dental internship or residency program to defer their student loans interest-free.