This Week In Washington
Today, House Republicans released their bill to reauthorize and overhaul the Higher Education Act (HEA). Among other polices, the bill would place a cap on the Grad PLUS loan program and potentially make significant changes to Income-Driven Repayment (IDR) plans and the Public Service Loan Forgiveness Program (PSLF). The bill is expected to be marked up in the House Education and the Workforce Committee next week. We will continue to examine the bill and provide additional details in the near future.
Reminder: If the bill passes the full House, then Congress will be one step closer to enacting policies that may harm law students (as well as undergraduates and other graduate and professional students). Congressional members must hear from you, their constituents, to stop potential negative policy changes in higher education.
Visit our #MakeTheCase advocacy campaign website for resources you can use to get involved!
And Save the Date - December 12 - for a Twitter chat on how together we can work to #ProtectPSL.F. More details to come shortly.
Also today, the Senate is expected to pass its version of tax reform along a party line vote. Recall that a few weeks ago, the House passed its version. If the Senate passes its bill, both chambers will need to hammer out the differences between the two bills in a conference committee and then vote to pass a final bill. This process is expected to occur before the end of the year. Contained in both versions are provisions that will negatively impact law (and all graduate and professional) students and institutions. Read our summary of the tax proposals here.
This week, the Department of Education’s (ED) Office of Federal Student Aid (FSA) held its annual financial aid conference. One of the sessions provided information about the process and volume of IDR plans and PSLF form submissions. FSA noted that enrollment in IDR plans has steadily increased over the past five years, while standard repayment plan enrollment has decreased at about the same rate. FSA also showed that borrowers have submitted employment certification forms for the PSLF program in high numbers in recent years. However, the data showed that over 43% of borrowers who have ever submitted a form have made no qualifying payments and another 40% have made less than 24 of the 120 required payments. Moreover, the data indicated that less than .0008% of borrowers are within two years of being eligible for loan forgiveness. You can examine the full session list or watch the sessions here.
At the same conference, Dr. A. Wayne Johnson, chief operating officer at FSA, unveiled ED’s plan to overhaul federal student loan servicing, dubbed the Next Generation Financial Services Environment (Next Gen). ED plans a series of changes to student loan processes that “creates a more standardized experience for borrowers,” and one that delivers a “service on par with world-class financial services firms.” Next Gen includes a plan to consolidate federal loan servicing from the current nine firms down to one payment processing system, although some subcontractors may be hired to perform various tasks. This new plan also seeks to change student loan disbursements by providing a special debit card for loan and Pell grant recipients in an effort to make students more conscious of where the money they spend is coming from. Finally, Next Gen seeks to create a mobile app allowing borrowers to handle various tasks and consolidate numerous student loan websites into one. The goal is to simplify the system and give students and families more flexibility on how they apply and interact with their student aid. You can read more about Next Gen in ED’s FAQ and fact sheet.
On Tuesday, the Senate education committee held a hearing entitled Reauthorizing the Higher Education Act: Examining Proposals to Simplify the Free Application for Federal Student Aid (FAFSA). During the hearing senators discussed ways to simplify FASFA by reducing the quantity of questions and improving the quality of the remaining ones. A large portion of the hearing focused on the utility of questions to determine Pell eligibility and how FASFA could be changed to better address students with limited or no contact with parents or access to parental financial information. Finally, Chairman Lamar Alexander (R-TN) announced that the committee plans to begin their work on HEA reauthorization at the beginning of next year.
Finally, President Trump plans to nominate Mark Schneider to be the director of the Institute of Education Science, which is ED’s statistics, evaluation and research arm. Schneider, formerly the commissioner of the National Center for Education Statistics during the George W. Bush administration, was a panelist at our Capitol Hill event about providing better data and consumer information to students and families.
News You Can Use
Schools are reporting that more students are being asked to verify their federal financial aid information. Officials say that this can discourage low-income applicants from completing the process or put students at a disadvantage for aid that is awarded on a first-come, first-served basis.
The following bills were recently introduced for consideration by the 115th Congress (2017-2018):
H.R. 4399 -- Public Service Loan Forgiveness Technical Corrections Act [Rep. Brendan Boyle (D-PA)] and companion bill S. 2136 [Sen. Sheldon Whitehouse (D-RI)] would allow borrowers enrolled in an ineligible repayment plan to qualify for Public Service Loan Forgiveness if their monthly payments were higher than what they would have paid under a qualifying income-driven repayment plan.
S. 2169 -- Student Right to Know Before You Go Act [Sen. Ron Wyden (D-OR)] would require higher education institutions to make graduation rates, debt levels, and expected earnings data available to prospective students and would create a privacy-enhancing technology designed to protect sensitive information that goes into calculating the data.