Higher Ed Policy Roundup: Vol. 8 - Issue 20

Late last week, the Education Department (ED) released an update on the Better Free Application for Federal Student Aid (FAFSA) implementation developments. The “Better FAFSA” refers to changes being made to the FAFSA form stemming from the FAFSA Simplification Act, which has also caused delays and implementation issues. According to the update, ED has received 9.4% fewer FAFSA forms compared to this time last year and has successfully processed over 1.8 million FAFSA corrections.

A federal judge dismissed eight out of 11 plaintiff-states in a lawsuit against the Biden-Harris Administration challenging the Saving on a Valuable Education (SAVE) plan. The plaintiffs claim that the SAVE plan incentivizes borrowers to consolidate their Federal Family Education Loan Program (FFELP) loans held by the state into Direct Loans which may cause the state to lose FFELP interest income. The remaining three states will be able to proceed with the suit.

A recent report from Third Way investigated whether online graduate programs are worth the financial investment, indicating that out of 1,723 programs included in the sample, 837 showed no earnings boost to completers four years after graduation.

This week, the National College Attaintment Network updated its FAFSA Tracker, revealing that FAFSA fillings for high school seniors are down 13.5% compared to the class of 2023.

A report from New America explores how student loan servicers can better inform borrowers of their opportunities for relief, including income-driven repayment (IDR) plans and loan forgiveness programs.

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

S. 4481 – The Student Loan Servicers Accountability Act [Sen. Ron Wyden (D-OR)] would examine student loan servicers’ actions that could impact borrowers’ credit ratings and ensure additional strict performance standards and harm-reduction contract terms for servicers before they can formalize a relationship with the federal government. A companion bill, H.R. 8660, was introduced in the House by Rep. Sara Jacobs (D-CA-51).

H.R. 8612 – Financial Fitness Act [Rep. Teresa Leger Fernandez (D-NM-3)] would establish a centralized personal finance education portal regarding federal financial aid on ED’s website.