Higher Ed Policy Roundup: Vol. 7 - Issue 12
This Week in Washington
This Week in Washington
On Wednesday, House Republicans released a debt limit bill that would substantially impact the Biden-Harris administration’s student loan policies. Specifically, the Limit, Save, Grow Act of 2023 would block President Biden’s student loan forgiveness plan, end the moratorium on student loan payments and interest, and prevent the new income-driven repayment changes that would lower a borrower's monthly payment from going into effect. If passed in the House, it is expected that the bill will fail in the Democratic-controlled Senate.
On Tuesday, the House Committee on Appropriations held a hearing titled “Budget Hearing – Fiscal Year 2024 Request for the United States Department of Education,” where Education Secretary Miguel Cardona testified on the Biden-Harris administration’s fiscal year 2024 budget request for the Education Department (ED). Secretary Cardona was grilled on topics including the student loan payment pause, ED’s plan to return borrowers to repayment, and the Biden-Harris administration’s student loan forgiveness plan. When asked by Rep. Juan Ciscomani (R-AZ-6) about the fairness of President Biden’s debt relief plan, Cardona underscored the administration’s focus on helping middle- and lower-class borrowers, touting that “90 percent of the dollars for the student loans that are currently paused go to people making under $75,000.”
Last week, the Office of Federal Student Aid (FSA) sent letters to higher education leaders reminding them of steps institutions should take prior to the new updated Free Application for Federal Student Aid (FAFSA) going into effect. Recall that the FAFSA Simplification Act and the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act required ED to simplify the financial aid application and allow ED and the Internal Revenue Service to exchange student tax information. The steps that FSA outlined include hiring and training more staff and providing additional resources for software and security.
Also last week, the Supreme Court rejected a request to block a settlement of $6 billion to student loan borrowers who say they were defrauded by their institutions. The move by the Supreme Court will now push the case back to the 9th Circuit Court of Appeals to consider the case, which was brought by three colleges in an attempt to stop the settlement.
News You Can Use
A new tool helps student loan borrowers predict their eligibility for financial aid once FAFSA simplification occurs.
Recent analysis from the Brookings Institution suggests the student loan pause has mostly benefited affluent borrowers.
Student loan servicers advise borrowers to take early action for loan repayment, as staff cuts may lead to long wait times.
The Federal Reserve Bank of Richmond released an economic brief highlighting disparities in student loan defaults and income-based repayment between White and Black borrowers.
There were no relevant student-aid related bills recently introduced for consideration by the 118th Congress (2023-2024).