October 25, 2019

Higher Ed Policy Roundup: Vol. 3 - Issue 38

Policy and Advocacy

This Week In Washington

On Tuesday, chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), Lamar Alexander (R-TN), introduced legislation aimed at simplifying the Free Application for Federal Student Aid (FAFSA). The FAFSA Simplification Act would reduce the number of questions and reduce the need for verification related to the FAFSA form. The new standalone bill appears to be a change in strategy for Alexander on reauthorization of the Higher Education Act (HEA). Recall that Alexander recently introduced a package of eight higher education proposals intended to update HEA which included FAFSA simplification. The package of bills saw sharp criticism from policymakers across the aisle who called for a comprehensive approach at HEA reauthorization. Alexander hopes to pass the FAFSA Simplification Act by the end of the year.

Yesterday, a federal judge held the U.S. Department of Education (ED) and Secretary Betsy DeVos in contempt in a case involving discharging the debts of former Corinthian Colleges students who claim they were defrauded by their schools. ED is now required to pay a $100,000 fine for violating a preliminary injunction that halted collection on the loans.

Dr. A. Wayne Johnson, chief strategy and transformation officer in the Office of Federal Student Aid, announced on Thursday that he would resign to run for Senate in Georgia. In an interview with The Wall Street Journal, Johnson called the student loan system “fundamentally broken.” He also called for up to $50,000 in federal student loans per borrower to be cancelled and for a tax credit of up to $50,000 for people who already repaid their student loans. Johnson said this plan is part of an effort to get the federal government out of student lending. His plan would be paid for by a one percent tax on revenue generated by all employers (including nonprofit organizations), according to the Atlanta Journal-Constitution.

News You Can Use

After bankruptcy court rules that private, for-profit loans are dischargeable in bankruptcy, will bar prep loans become more expensive for borrowers?

A new report from the Center on Budget Policy and Priorities finds that rising college costs may threaten diversity in higher education and recommends greater state investment and increased need-based aid.

A new study by the Georgetown University Center on Education and the Workforce finds Black and Latino workers have increased their share of good jobs, but equity gaps remain. Not only do White workers have a disproportionate share of good jobs, they earn more at every level of education.

Recent Legislation

The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):

H.R.4749 – [Rep. Lacy Clay (D-MO-1)] would provide temporary authority to the Secretary of Education to reissue certain student loans to reduce interest rates paid by borrowers.

H.R.4750 – [Rep. Lacy Clay (D-MO-1)] would amend bankruptcy laws to make student loans dischargeable.

H.R.4787 – [Rep. Ami Bera (D-CA-7)] would amend the Higher Education Act by increasing the threshold for what working students can earn without it counting against them in accessing need-based federal financial aid.