This Week In Washington
On Tuesday, Senator Lamar Alexander (R-TN), chairman of the Senate Committee on Health, Education, Labor, and Pensions, and Senator Patty Murray (D-WA), ranking member of the committee, agreed on a deal that would amend the FUTURE Act and would permanently reauthorize $255 million in annual funding for Historically Black Colleges and Universities and other minority-serving institutions. The legislation passed the Senate by voice vote yesterday and now awaits action in the House. Recall that the original version of the FUTURE Act was recently passed by the House, but was blocked by Senator Alexander who was instead hoping to pass a package of eight higher education proposals intended to update the Higher Education Act. The agreed upon deal also includes components of the FAFSA Act which will reduce the number of questions on the FAFSA and provisions that allow the Department of Education (ED) and the Internal Revenue Service to exchange student tax information to more accurately award federal aid and streamline the income-driven repayment process.
At the annual Federal Student Aid Training Conference on Tuesday, ED Secretary Betsy DeVos proposed creating a new independent federal agency to manage the federal student loan portfolio instead of ED’s Office of Federal Student Aid. DeVos stated that “Congress never set up the U.S. Department of Education to be a bank, nor did it define the secretary of Education as the nation’s 'top banker.” House Education and Labor Chairman Bobby Scott (D-VA-3) opposed the idea stating that “there’s nothing that could be done with a new agency that can’t be done today.” There is currently no formal proposal or bill language available.
Next week, Secretary DeVos will testify at a House Education and Labor Committee hearing on the implementation of the 2016 borrower defense repayment rule and the Trump administration’s approach to debt relief for defrauded student borrowers.
News You Can Use
The Center for American Progress released a report showing that black student borrowers continue to face crisis-level high default rates. The analysis concludes that income-driven repayment plans are a “necessary but ultimately insufficient tool for addressing loan default.”
The Manhattan Institute published a report that proposes streamlining enrollment in income-driven repayment plans as a means to drive down student loan defaults.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S. 2962 – Higher Education Loan Payment and Enhanced Retirement (HELPER) Act [Sen. Rand Paul (R-KY)] would allow borrowers to pay off their student loans with funds drawn from their retirement savings.
H.R. 5287 – [Rep. Al Lawson (D-FL-5)] would amend the Fair Debt Collection Practices Act to prohibit debt collectors from recouping on certain Federal student loan debt when the borrower would not be required to make payments under an income-driven repayment plan.
H.R. 5294 –Student Borrower Protections Act [Rep. Alma Adams (D-NC-12)] would establish a postsecondary education loan borrower bill of rights and require certain creditors to obtain private loan certifications from schools. The bill would also require the CFPB to issue rules to establish standards for reporting information related to student loans to consumer reporting agencies.