This Week In Washington
On Wednesday, the House Education and Labor Committee held a hearing entitled “Innovation to Improve Equity: Exploring High-Quality Pathways to a College Degree.” The hearing focused on the need to potentially expand Pell grants, in both the amount awarded and the programs for which it could be used. Lawmakers also spent considerable time discussing the utility and effectiveness of community colleges to educate so-called non-traditional students. The witnesses presented best practices and offered suggestions for how lawmakers could help states and institutions better achieve college completion while ensuring programs were high quality. You can watch a replay of the hearing here.
News You Can Use
The Institute for College Access & Success released a report that found defaulted borrowers were more likely to be black, be low-income, have not completed their program, or have attended for-profit schools.
In light of recent analyses that show repayment disparities for borrowers of color, the Center for American Progress recommends that the U.S. Department of Education (ED) collect more detailed data on federal student loan borrowers by race and ethnicity to improve oversight and address inequities.
The Financial Literacy and Education Commission—a federal commission comprised of a number of government agencies, including the Treasury Department and ED— recommends institutions of higher education improve financial literacy by making financial education courses mandatory, issuing financial aid letters that itemize attendance costs, and informing borrowers annually of their debt and what to expect in repayment.
New data from MeasureOne shows that private loans made to graduate students represented 12 percent of the total outstanding private loan volume—a decrease of about 20 percent compared to 5 years prior. Only about one percent of graduate loans were 90 or more days delinquent, nearly the lowest in a 12-year period.
A new research study found that states who had decreased higher education spending, on a per student basis, saw a decrease in undergraduate and graduate degree attainment at public universities, which could negatively impact a state’s work force.
The following bills have been recently introduced for consideration by the 116th Congress (2019-2020):
S. 1796 – Terrorism Survivors Student Loan Deferment Act [Sen. Marco Rubio (R-FL)] would grant ED the authority to provide survivors of terrorist attacks automatic deferments of their federal student loan payments.
S. 1845 – If It’s Good Enough for the Banks, It’s Good Enough for Students Act [Sen. Jeff Merkley (D-OR), et al.] would allow federal student borrowers to refinance their loans at the same rate banks can borrow from the Federal Reserve (currently 3 percent). The bill would also require the Consumer Financial Protection Bureau and ED to implement a campaign to inform eligible borrowers about loan refinancing.
H.R. 3257 – Student Loan Fairness Act [Rep. Karen Bass (D-CA-37), et al.] would reform federal student lending by capping borrowers' monthly payments to 10 percent of their discretionary income, limiting interest capitalization to 10 percent of the original principal amount, granting tax-free forgiveness up to $45,520, reducing the number of payments to receive Public Service Loan Forgiveness from 120 to 60, and limiting interest rates to 3.4 percent. The bill would also allow eligible private student loan borrowers to convert their debt into federal Direct Loans.