Higher Ed Policy Roundup: Vol. 7 - Issue 1
This Week in Washington
This Week in Washington
On Monday, the Republican Steering Committee voted to recommend Rep. Virginia Foxx (R-NC-5) to lead the House Education and the Workforce Committee over her challenger Rep. Tim Walberg (R-MI-5). Rep. Foxx sought and received a waiver to lead the committee because Republican rules prohibit members from serving more than three consecutive terms as leader of a committee. Foxx’s appointment will now head to the GOP conference for a full vote that the congresswoman is expected to win.
On Wednesday, the U.S. Department of Education (ED) released a Notice of Proposed Rulemaking (NPRM) revamping federal student loan repayment plans by amending the Revised Pay as You Earn (REPAYE) repayment plan and combining the Income Contingent Repayment (ICR) and the Income-Based Repayment (IBR) plans under the umbrella term of “Income-Driven Repayment (IDR) plans.” Regarding REPAYE, the NPRM would:
- Increase the discretionary income threshold from 150 percent to 225 percent of the federal poverty rate;
- Require borrowers with only undergraduate debt to pay 5 percent of their discretionary income monthly; require borrowers with only graduate debt to pay 10 percent of their discretionary income monthly; and require borrowers with both undergraduate and graduate debt to pay between 5 and 10 percent of their discretionary income based upon a weighted average;
- Eliminate the accumulation of unpaid interest;
- Provide student debt forgiveness after 10 years to borrowers with an original student loan principal balance of $12,000 or less;
- Provide borrowers with credit for certain deferments and forbearances;
- Prevent payments from fully resetting after consolidation;
- Automatically enroll delinquent borrowers into an IDR plan;
- Grant borrowers in default access to an IDR plan; and
- Phase out new enrollments in the Pay As You Earn and ICR plans and limit when a borrower can switch into the IBR plan.
The NPRM is open for a 30-day public comment period. You can provide comments here.
News You Can Use
The student loan repayment system breakdown and steps ED can take beyond recent policy changes to keep borrowers from defaulting.
Level funding of the Office of Federal Student Aid could hamper implementation of key student aid programs, such as income-driven repayment and Public Service Loan Forgiveness, but also basic core functions of the agency.
The following bill(s) have been recently introduced for consideration by the 118th Congress (2023-2024):
H.R. 138 – Private Student Loan Bankruptcy Fairness Act [Rep. Steve Cohen (D-TN-9)] would allow for the dischargeability of private student loans in bankruptcy.