This Week In Washington
Both chambers of Congress are on recess this week, but the Executive branch has made news:
The U.S. Department of Education (ED) is seeking public comment on the current standard that determines whether a borrower can have his or her federal student loans discharged in bankruptcy. Under current law, borrowers cannot discharge federal student loans through bankruptcy unless they show the debt from discharge would impose an “undue hardship” on the borrower and the borrower's dependents. More specifically, ED wants public input on the factors to be considered in evaluating “undue hardship” claims. You can submit comments here. The comment period ends on May 22.
On Tuesday, ED began soliciting bids for its proposed new overhaul of federal student loan collection. This new system, part of ED’s more broad “Next Gen” revamp of Federal Student Aid, seeks to modernize managing and collecting student loan payments. The solicitation suggests there could be multiple contractors handling distinct steps in loan repayment or one contractor could do it all. Proposals will be accepted until April 6, at which point ED will advance contractors on to a second round based on outlined criteria, which includes strategic fit and cost.
News You Can Use
The Brookings Institution reviewed administrative student loan data and found the number of federal student loan borrowers with large balances has increased since 1990, but that these large-balance borrowers have strong labor outcomes and low default rates.
An examination of federal student loan data, performed by the Urban Institute, found that borrowers enrolled in Income-Driven Repayment (IDR) plans tend to currently live in households making between $20,000 and $60,000 per year, while the majority of high-income households use standard or non-IDR plans to repay their loans.
Gallup, in partnership with Perdue University and the Lumina Foundation, surveyed recent J.D. and MBA degree recipients and found, although not consistent across all years studied, the graduates generally rated the value of their degree the lowest amongst all postgraduate degree recipients, saying their degree did not prepare them for life outside of graduate school. This follows a recent AccessLex Institute and Gallup study that showed recent law school graduates are more likely to question the value of their degree.
No student aid-related bills were introduced this week for consideration by the 115th Congress.