This Week in Washington
On Tuesday, the House Education and Labor Committee’s Subcommittee on Higher Education and Workforce Investment held a hearing to discuss how Congress can help students and institutions cope with COVID-19. In her opening statement, Chairwomen Susan Davis (D-CA-53) highlighted that delays and restrictions coming from the Department of Education (ED) had unnecessarily prevented some students from receiving relief. She also noted that “the CARES Act simply did not go far enough to prepare our institutions for this looming economic recession” and that the recently passed Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would help to fill in the gaps. Ranking Member Lloyd Smucker (R-PA-11) countered that point stating that the bill “launches a socialist takeover of the private student loan market by forcing private student loan companies to offer income driven repayment terms and conditions that are dictated by the federal government.”
In a recent court filling, ED admitted to the continued garnishment of the wages of defaulted student borrowers, violating the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Recall that the CARES Act provided relief to federal student loan borrowers by suspending the collection and offset of defaulted federal student loans for a period of 6 months. ED has said that it would work to comply with the CARES Act and that it would provide the court with reports outlining its progress.
The House Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee advanced its Fiscal Year 2021 spending bill. The bill would provide ED with an increase of $716 million from Fiscal Year 2020 with $45 million of that going to federal student aid programs. The bill will now head to the full Appropriations Committee for markup.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S. 4141 – Bank on Students Coronavirus Emergency Loan Refinancing Act [Sen. Elizabeth Warren (D-MA)] would allow student loan borrowers to refinance their student loan debt down to the historically low rates offered to federal borrowers in the 2020-2021 school year. Companion legislation, H.R. 7449, was introduced in the House by Rep. Joe Courtney (D-CT-2).