Higher Ed Policy Roundup: Vol. 6 - Issue 19

Late last week, top House Republicans introduced the Responsible Education Assistance through Loan (REAL) Reforms Act, which would substantially limit the government’s investment in higher education. Among other provisions, the bill would eliminate Grad PLUS loans, eliminate the Public Service Loan Forgiveness (PSLF) program for new borrowers and end time-based loan forgiveness under income-driven repayment (IDR) plans. The REAL Reforms Act is not expected to move in the Democratic- controlled House, but it is a sign of the Republican agenda if the party takes control in November. Read our statement on the impact of the bill here.

It was reported that the Education Department has developed an implementation plan in the event that President Biden signs an executive order canceling federal student loan debt. Recall that it has been reported that President Biden is considering canceling $10,000 of federal student loan debt for borrowers earning less than $150,000 (or $300,000 for married couples filing jointly). According to the report, the plan includes applying forgiveness to outstanding interest before principal balances and suggests that Pell grant recipients could receive an additional amount of loan forgiveness. There is still no word from the White House on when a final decision or announcement on loan forgiveness will be made.

An NPR audio segment discusses the origins of federal student loans in the United States and promises the government made.

The status of federal student aid programs is examined in a new report by the National Association of Financial Aid Administrators.

The following bills have been recently introduced for consideration by the 117th Congress (2021-2022):

H.R. 8700 – Simplifying Student Loans Act [Rep. Susan Wild (D-PA-7)] would replace the existing student loan repayment plans with one fixed repayment plan and one income-based repayment plan, establish a one percent interest rate on federal student loans and cap monthly student loan payments under IDR plans at no more than 10 percent of a borrower's discretionary income.

S. 4772 – [Sen. Rick Scott (R-FL)] would require colleges participating in federal financial aid programs to pay a percentage of the cost of attendance for each enrolled full-time student, based on the endowment fund of the institution.