Higher Ed Policy Roundup: Vol. 8 - Issue 10

On Wednesday, the Biden-Harris Administration announced plans to partner with 40 entities, including nonprofits and labor unions, to help expand enrollment in its new Saving on a Valuable Education (SAVE) income-driven repayment plan. Recall that the SAVE plan is aimed at lowering borrowers’ monthly student loan payments by increasing the share of protected income from 150% to 225% of the federal poverty level and eliminating unpaid interest each month. There are more than 7.7 million borrowers enrolled in the plan, and the Administration hopes this new effort will help to enroll an additional 100 million.

The Education Department discovered that a vendor incorrectly calculated a financial aid formula impacting 200,000 applications. The error, which will require reprocessing of the affected applications, will cause additional delays of the Free Application for Federal Student Aid (FAFSA). Recall that the FAFSA, which was released in December, has been plagued with issues stemming from delays due to the implementation of the FAFSA Simplification Act.

A recent report from The Brookings Institution indicated that Pell Grant recipients often pursue majors associated with lower earnings than non-Pell Grant recipients.

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

S. 4058 – Codifying SAVE Plan Act [Sen. Jeff Merkley (D-OR)] would codify the Biden-Harris Administration’s new SAVE income-driven repayment program into law.

H.R. 7831 – [Rep. Beth Van Duyne (R-TX-24)] would penalize higher education institutions with high percentages of students who default or make insufficient payments on federal student loans.