This Week In Washington
Top Democrats on the Senate education and banking committees wrote a letter calling on the U.S. Department of Education (ED) and Consumer Financial Protection Bureau (CFPB) to resume coordination concerning borrowers’ complaints about student loans. Recall that ED terminated operating agreements between the agencies which allowed the sharing of information on the oversight of federal student loans. Arguing that the information-sharing arrangement between agencies is required by federal law, Senators Patty Murray (D-WA) and Sherrod Brown (D-OH) urged Education Secretary Betsy DeVos and CFPB Director Kathy Kraninger to reestablish the agreements, which Director Kraninger has told Congress is a priority for the CFPB.
After losing a legal battle to delay implementation of Obama-era rules governing online colleges, ED has begun implementation of the “state authorization” rules for distance education providers. The regulations require that these providers ensure that the states in which they operate have a process for resolving student complaints. ED officials announced that, as these rules take effect, thousands of students in California enrolled in online programs could potentially lose eligibility for federal student aid programs because California does yet not have a process for accepting student complaints from out-of-state public and nonprofit colleges.
News You Can Use
Diverse: Issues in Higher Education reported on a study by AccessLex Institute, which found that limiting federal loans to graduate and professional students would harm access for African American students and students at Historically Black Colleges and Universities.
Though the Public Service Loan Forgiveness program has faced scrutiny for its rejection rate, experts predict that the approval rate will increase substantially in the coming years.
The Center for Responsible Lending and the NAACP released a report that documents the disproportionate impact that student loan debt has on borrowers of color and advocates for system reforms.
The Federal Reserve Bank of New York released new research that examines student loan balances and repayment behavior over time, by institution type and degree program.
The following bills have been recently introduced for consideration by the 116th Congress (2019-2020):
H.R. 3833 – Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act [Rep. Suzanne Bonamici (D-OR-1), et al.] would automate the process of annually recertifying borrowers’ income in order to verify eligibility for income-driven repayment plans and discharge of federal student loans for borrowers with a total and permanent disability. Read AccessLex Institute’s letter of support here.
S. 2184 – Know Before You Owe Private Education Loan Act of 2019 [Sen. Richard Durbin (D-IL), et al.] would require schools to counsel students and inform them of any unused federal student aid eligibility before they may borrow education loans from a private lender. The bill would also require the school to confirm enrollment status, cost of attendance, and estimated federal financial aid assistance before a private student loan can be made.
H.R. 3887 | S. 2235 – Student Loan Debt Relief Act of 2019 [Rep. Jim Clyburn (D-SC-6), et al. | Sen. Elizabeth Warren (D-MA)] would eliminate an estimated 95 percent of student loan debt held by Americans and allow private student loan borrowers to receive loan cancellation by refinancing and converting their debt into federal student loans. The bill also includes provisions to automatically refinance remaining federal student loans to lower interest rates and allow borrowers to discharge their loans in bankruptcy.