April 28, 2023

Higher Ed Policy Roundup: Vol. 7 - Issue 13

Policy and Advocacy


This Week in Washington

Failure to increase funding to the Education Department (ED) in Fiscal Year 2023 is forcing ED to cut customer service to student loan borrowers while preparing to return millions of borrowers back into repayment. The funding shortfall is expected to cause borrowers to experience longer hold times, slower paperwork processing, and reduced call center hours. In lieu of receiving additional funds, ED is discussing making changes such as providing a “safety net” period during which borrowers won’t be penalized if they miss payments when payments resume.

On Wednesday, the House passed the Republican-backed debt limit bill Limit, Save, Grow Act of 2023. Recall that the bill 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. It is expected that the bill will not be taken up in the Democratic-controlled Senate and is simply a vehicle to begin negotiations with President Biden. 

On Tuesday, the Committee on Education and the Workforce Chairwoman Virginia Foxx (R-NC-5) and the Subcommittee on Higher Education and Workforce Development Chairman Burgess Owens (R-UT-4) sent a letter to Education Secretary Miguel Cardona requesting information about ED's recent activities. Specifically, the letter’s requests include ED’s plan for returning borrowers back into repayment, how ED has prepared servicers for resumption, and information related to ED’s financial decisions during the pandemic. The Republican leaders requested that this information be provided by ED within two weeks. 

Also on Tuesday, the Office of Federal Student Aid awarded Unified Servicing and Data Solution (USDS) contracts for student loan servicing to five companies. The companies include Central Research, Inc., EdFinancial Services, Maximus Education LLC, MOHELA, and Nelnet Diversified Solutions. The goal of the USDS contracts is to improve the student loan repayment system and assist borrowers in more effectively managing their debt.

News You Can Use

Legal experts predict the U.S. Supreme Court will rule against the Biden-Harris Administration's student loan forgiveness plan.

Changes to the financial aid formula could result in students from families that own farms or small businesses receiving less aid.

International policy experts believe that the keys to transforming higher education financing in the U.S. are having one income-driven repayment plan and using employer withholding to collect payments.

Recent Legislation

The following bill(s) have been recently introduced for consideration by the 118th Congress (2023-2024):

H.R. 2811Limit, Save, Grow Act of 2023 [Rep. Jodey C. Arrington (R-TX-19)] would nullify regulations for the revised income-driven repayment plan, prohibit the cancellation of federal student loan debt, and end the student loan payment pause.