Higher Ed Policy Roundup: Vol. 8 - Issue 12

On Monday, the Education Department (ED) released more details about its plan to pursue federal student debt forgiveness using the Higher Education Act. The draft regulation, which was negotiated by a rulemaking committee last fall and early this year, will make 26 million borrowers eligible for forgiveness by permitting the following types of debt forgiveness waivers:

• A waiver of up to $20,000 of the amount a borrower’s balance has grown due to unpaid interest on their loans after entering repayment, regardless of income;
• For low and middle-income borrowers in an income-driven repayment plan, complete waiver of the entire amount a borrower’s balance has grown due to unpaid interest on their loans;
• Automatic discharge of debt for borrowers otherwise eligible for loan forgiveness under the Saving on a Valuable Education (SAVE) Plan, closed school discharge, or other forgiveness programs, but who are not enrolled;
• Debt forgiveness for borrowers with only undergraduate debt if they first entered repayment at least 20 years ago and borrowers with any graduate school debt if they first entered repayment 25 or more years ago;
• Debt forgiveness for borrowers enrolled in institutions or programs that lost their eligibility to participate in the Federal student aid program or were denied recertification because they cheated or took advantage of students, or borrowers who attended institutions or programs that closed and failed to provide sufficient value; and
• Automatic debt forgiveness for borrowers predicted to likely default on their loans or for borrowers who could describe how childcare or a medical expense is preventing them from being able to pay back their student loan debt.

According to ED, the public will have an opportunity to comment on the draft regulation in the coming weeks.

On Wednesday, the House Subcommittee on Higher Education and Workforce Development held a hearing to discuss the Free Application for Federal Student Aid (FAFSA), which has been plagued with issues stemming from delays due to the implementation of the FAFSA Simplification Act. ED Secretary, Miguel Cardona, did not attend the hearing, but the witness list included stakeholders such as Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators (NASFAA). In his opening statement, Subcommittee Chair Burgess Owens (R-UT-04) placed blame on ED and highlighted that the delays could mean that 20% fewer students will enroll in postsecondary education this academic year. Watch the Higher Education and Workforce Development Subcommittee hearing.

The National College Attainment Network published an analysis of FAFSA submissions using data from the Office of Federal Student Aid, revealing that FAFSA completions are down by 40% compared to the same period last year.

A recent report by the Education Trust explores the barriers, strengths, limitations, and influence that state financial aid programs can have on the ability of students of color and students from low-income backgrounds to access and afford college.

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

H.R. 7877 – [Rep. Donald Norcross (D-NJ-1)] would amend the Higher Education Act of 1965 to revise the Public Service Loan Forgiveness program.

H.R. 7879 – [Rep. Katie Porter (D-CA-47)] would amend the Higher Education Act of 1965 to include court-ordered receivership in the list of actions resulting in a change of ownership of higher education institutions.

H.R. 7880 – [Rep. Katie Porter (D-CA-47)] would amend the Higher Education Act of 1965 to require institutions of higher education to maintain specific adjusted cohort default rates to participate in Title IV programs of the Act.

H.R. 7892 – [Rep. Lauren Underwood (D-IL-14)] would amend the Higher Education Act of 1965 to rename master promissory notes for loans made under part D to student loan contracts.