Higher Ed Policy Roundup: Vol. 8 - Issue 23

On Thursday, the Eighth Circuit Court of Appeals granted an order to temporarily block the Education Department’s (ED) Saving on a Valuable Education (SAVE) plan from being implemented. This action was prompted by an emergency motion filed by the Missouri attorney general asking the court to prevent ED from implementing a provision that lowers the monthly payments for borrowers. Late last month, Missouri received a preliminary injunction blocking ED from providing debt cancelation under SAVE. Missouri argued that the lowered payments, which would qualify some borrowers for $0 monthly payments, is a way to circumvent the injunction by providing borrowers with an alternate route to loan forgiveness. ED Secretary Miguel Cardona announced today that borrowers enrolled in the SAVE plan will be placed in an interest-free forbearance while the Biden Administration “continues to vigorously defend the SAVE Plan in court.”

The same provision is also at play in the U.S. Supreme Court where the attorneys general in Alaska, South Carolina, and Texas have asked the Court to block the lowered monthly payments for borrowers. In this case, ED is asking the Supreme Court to deny the states’ petition and allow the lower courts to make a ruling before deciding on whether to accept the case. The attorneys general are also asking the Supreme Court to decide whether the entire SAVE plan should be blocked.

In early July, the Missouri Higher Education Loan Authority (MOHELA) set the record for processing the highest amount of student loan forgiveness in the history of the Public Service Loan Forgiveness (PSLF) program.

A report by the Century Foundation compared demographic data to Free Application for Federal Student Aid (FAFSA) completion rates, finding that zip codes with a high share of residents in poverty, non-college adults, or Black and Latino residents have experienced a 20% or more drop-off in FAFSA completions this year.

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

S. 4632 – FAFSA Deadline Act [Sen. Bill Cassidy (R-LA)] would establish an earlier application processing cycle for the FAFSA. A companion bill, H.R. 8932, was introduced in the House by Rep. Erin Houchin (R-IN-9).

H.R. 8944 – [Rep. Teresa Leger Fernandez (D-NM-3)] would establish a centralized personal finance education portal regarding federal financial aid on the ED website.

S. 4686 – Transparency in Student Lending Act [Sen. John Barrasso (R-WY)] would require ED to disclose information to federal student loan borrowers, such as loan amounts, their annual percentage rates, standard terms, and any fees or additional costs.

S. 4701 – Protecting Our Students and Taxpayers (POST) Act [Sen. Richard Durbin (D-IL)] would prohibit for-profit colleges and universities from receiving more than 85% of their revenue from the federal government. A companion bill, H.R. 9004, was introduced in the House by Rep. Steve Cohen (D-TN-9).