This Week In Washington
On Monday, the Trump administration outlined its principles for reforming the Higher Education Act (HEA). Regarding student loans, the White House is calling for explicit loan limits to be placed on Grad PLUS; however, they did not specify a dollar amount. (Note: Grad PLUS already has a loan limit: it is an institution’s published “cost of attendance.”) Also included in the principles are proposals to consolidate the income-driven repayment plans down to one that has a 12.5 percent monthly payment, eliminate the Public Service Loan Forgiveness Program, and require a data-sharing agreement between the Department of Education and the Internal Revenue Service. AccessLex Institute released a statement this week opposing many of the proposals offered by the White House.
The White House also supports giving financial aid administrators the authority to limit how much in federal loan dollars students can borrow, and it would like to see an increase in the quantity and quality of financial aid counseling. The Chairman of the Senate education committee, Senator Lamar Alexander (R-TN), said it was “helpful to have these suggestions as [he works] with Senator Patty Murray … to develop bipartisan recommendations so that we can report legislation to the full Senate before summer.” However, Senator Murray (D-WA) slammed the White House proposals saying “this proposal would end up hurting students,” and she would work with Chairman Alexander to “find real and serious solutions that actually help students afford higher education.”
With HEA conversations in full force, NOW is the time for you to get involved by contacting your Congressional Members to ensure that policies that would negatively affect your students and school are not adopted in the next HEA. Read more about our available resources to help you #MakeTheCase for legal education. Read AccessLex Institute’s HEA guiding principles and full set of HEA policy recommendations.
The U.S. Department of Education (ED) announced late last week that it will fully implement the Obama-era student loan regulations known as Borrower Defense to Repayment, which governs the ability of defrauded borrowers to receive loan discharge. Also, ED said it will begin enforcing provisions in the rule that ban institutions from using mandatory arbitration agreements—agreements that require students to resolve disputes through arbitration instead of in court—and agreements that prevent students from collectively pursuing a class action lawsuit, so long as they receive federal aid.
On Thursday, President Donald Trump signed an executive order on postsecondary education, which promotes free speech on college campuses, accountability, and greater data transparency. More specifically, the order calls on ED to update the College Scorecard with program-level data on: median earnings, median Stafford and Grad PLUS loan debt, and student loan default rate and repayment rates. The College Scorecard should also provide institution-level data on aggregate student loan default rates and repayment rates, including on Grad PLUS and Parent PLUS loans. The executive order also instructs ED to produce a report identifying “policy options” for institutional risk sharing.
News You Can Use
The Student Borrower Protection Center writes that students loans are dischargeable in bankruptcy (if the borrower meets the undue hardship standard), but that some lenders are telling borrowers they are not.
In a New York Times op-ed, Tiffany Jones of the Education Trust highlights the unmet need that students would still experience under “free college” proposals that only cover tuition costs.
Washburn University School of Law in Kansas announced they will offer future students the option to complete their final year of law school while participating in an externship in the location they plan to practice after graduation.
The following bill(s) have been recently introduced for consideration by the 116th Congress (2019-2020):
S. 800 | H.R. 1766 -- College Transparency Act [Sen. Bill Cassidy (R-LA) and Sen. Elizabeth Warren (D-MA) et al. | Rep. Paul Mitchell (R-MI-10) and Rep. Raja Krishnamoorthi (D-IL-08) et al.] would repeal the ban on a federal student-level data system to allow for reporting on measures such as enrollment and completion, disaggregated by credential and program. Read AccessLex Institute’s letter of support here.
H.R. 1798 – [Rep. Kathleen Rice (D-NY-4)] would increase the deduction allowed for student loan interest and exclude it from gross income discharges of income-contingent or income-based student loan indebtedness.
H.R. 1810 – Kids to College Act [Rep. Mark Green (R-TN-7) and Rep. Vicente Gonzalez (D-TX-15)] would authorize schools to offer income share agreements, which allow students to borrow money from their school to be repaid based on a percentage of their earnings over a certain number of years.