Higher Ed Policy Roundup: Vol. 7 - Issue 7

On Thursday, President Biden released his budget request for fiscal year 2024. The budget calls for:

• Two years of subsidized tuition for students from families earning less than $125,000 who are enrolled in a four-year Historically Black College and University (HBCU), Tribally Controlled College and University (TCCU), or Minority-Serving Institution (MSI);
• $350 million for four-year HBCUs, TCCUs, and MSIs to expand research and development infrastructure;
• $2.7 billion for the Office of Federal Student Aid, a $620 million increase above the 2023 enacted level;
• $500 boost to the current $7,395 maximum Pell Grant award for the upcoming academic year; and
• A request to permanently exclude forgiven student loan amounts from taxable income.

Also on Thursday, House Committee on Education and the Workforce Ranking Member Bobby Scott (D-VA-3) and Higher Education and Workforce Development Subcommittee Ranking Member Frederica Wilson (D-FL-24) reintroduced the Lowering Obstacles to Achievement Now (LOAN) Act, which would help to lower the cost of higher education for borrowers. The LOAN Act, which was first introduced last Congress, is intended to alleviate the student debt crisis. Some of the provisions in this bill include:

• Reinstating subsidized loans for graduate and professional students;
• Eliminating origination fees;
• Lowering interest rates on federal student loans; and
• Shortening the Public Service Loan Forgiveness (PSLF) program’s forgiveness requirement from 120 on-time payments to 96 on-time payments.

SoFi Technologies Inc., a student loan refinancing company, sued the Biden-Harris Administration asking the U.S. District Court for the District of Columbia to end the student loan forgiveness pause that has been in place since March 2020. The company, which claims that the Administration acted illegally by not ending the pause when it announced an end to the COVID-19 national emergency on May 11, claims that it has lost between $300-$400 million since the pause was announced. The payment pause is set to stay in place until the U.S. Supreme Court makes a decision on the constitutionality of the student loan forgiveness program.

With inconsistent estimates of the cost of the new income-driven repayment plan, it is unclear if the Education Department knows how much it will cost and who exactly will benefit.

According to the Bureau of Labor Statistics, college tuition and fees increased 4.7 percent from February 2020 to February 2023.

Members of Congress sent a letter to Under Secretary of Education James Kvaal urging the Department to disaggregate the demographics of students who are accepted to college through early decision, early action, and legacy policies.

There were no relevant student-aid related bills recently introduced for consideration by the 118th Congress (2023-2024).