May 13, 2022

Higher Ed Policy Roundup: Vol. 6 - Issue 6

Policy and Advocacy


This Week in Washington

On Wednesday, the U.S. Treasury’s 10-year Treasury note auction resulted in an increase in interest rates for federal student loans disbursed on or after July 1, 2022. The rates are expected to increase from 5.28 percent to 6.54 percent for graduate Direct Unsubsidized Loans and from 6.28 percent to 7.54 percent for Grad PLUS loans. Interest rates on federal student loans have been set annually according to the 10-year Treasury note rate, plus a fixed percentage that differs by loan type (e.g., subsidized Stafford, unsubsidized Stafford, PLUS). The interest rates will be fixed for the life of the loan.

Also on Wednesday, the Department of Education (ED) warned the White House that implementing a cap on student debt forgiveness could create significant implementation issues due to insufficient income data.  Recall that last week, White House press secretary Jen Psaki suggested that any student debt forgiveness that the Biden-Harris administration considers implementing would be limited by an income cap. Chief among ED's concerns is that they are not in possession of the necessary income information for most borrowers, and they would be unable to cancel federal student loans without requiring borrowers to take some action resulting in delayed or unrealized forgiveness.

News You Can Use

How student loans are drowning some women in debt.

Student loans are now their most expensive in years – here's why.

Recent Legislation

The following bill has been recently introduced for consideration by the 117th Congress (2021-2022):

H.R. 7729CFPB Student Loan Integrity and Transparency Act [Rep. Katie Porter (D-CA-45)] would require ED and Consumer Financial Protection Bureau (CFPB) to share information, student loan servicers to work with the CFPB’s Ombudsman, and the Ombudsman’s office to increase its staff capacity.