This Week In Washington
On Wednesday, the Department of Education (ED) announced a plan to modify the criteria for discharging loans under the current Borrower Defense to Repayment (DTR) regulations. Under the new scheme, ED will compare a student’s average earnings to that of students in similar vocational programs. DTR applicants will receive complete loan forgiveness if their earnings are less than 50 percent of their peers’; but if it is above 50 percent of their peers’, forgiveness will be provided on a decreasing slide scale. ED also announced it has approved 12,900 claims and rejected 8,600 claims. Recall that up until this point, the Trump Administration had not processed any of the outstanding claims, and it is in the middle of renegotiating a new set of DTR regulations.
Also on Wednesday, the House and Senate passed the Tax Cuts and Jobs Act. Unlike when the tax reform bills in both chambers were originally introduced, the final conference bill did not contain many of the harmful higher education provisions. The bill does, however, tax some large private college endowments. President Trump is expected to sign the bill into law before the end of the year..
The following bills were recently introduced for consideration by the 115th Congress (2017-2018):
S. 2224 – Empowering Student Borrowers Act [Sen. Joe Donnelly (D-IN)] would require higher education institutions to send a letter to students every year detailing each student’s total loan debt, projected monthly repayment amounts, and the estimated interest rate for each loan.
S. 2228 – Higher Education Reform and Opportunity Act [Sen. Mike Lee (R-UT)] would allow states to establish an alternative accreditation system, reduce the myriad student loan programs into one, create one repayment period for undergraduate loans and another for graduate loans, cap borrowing amounts, eliminate student loan forgiveness, and fine schools with poor student loan repayment rates.
S. 2231 -- Student Protection and Success Act [Sen. Jeanne Shaheen (D-NH)] would rescind federal student loan eligibility for higher education institutions at which less than 15 percent of students are not repaying their loans within three years of graduating or leaving school. The bill would also require higher education institutions to pay a risk-sharing fee equal to a percentage of students’ loan balance that is not being repaid to the Department of Education.