This Week In Washington
The U.S. Department of Education (ED) has published the requirements and guidelines on how to access the $350 million fund created by Congress earlier this year to provide Public Service Loan Forgiveness (PSLF) to borrowers who were enrolled in ineligible repayment plans. ED is calling the program the Temporary Expanded PSLF (TEPSLF). To be eligible, a borrower must: (1) have completed all of the requirements of PSLF, (2) been in one of the ineligible repayment plans, (3) have applied for forgiveness and been denied, and (4) then apply through the new TEPSLF program. Funds will be disbursed on a first-come first-served basis and are not guaranteed. For additional information, ED has set up a new website for the TEPSLF program.
On Thursday, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act. The bill provides protections to cosigners and student borrowers if one or the other passes away, and it also allows private loan borrowers to have a default removed from their credit report if they successfully complete the creditor’s loan rehabilitation program.
House Republicans met on Wednesday evening to discuss potentially bringing the PROSPER Act to the House floor for a vote. Reporting indicates that the meeting was not well attended and no final decisions have been made. If the bill is to come to the floor it would likely be in the next few months. Now is the time to make your voices heard! Contact your Congressional Members and tell them to reject the policies that would harm law students. For resources, visit our #MakeTheCase advocacy website.
On Tuesday, Education Secretary Betsy DeVos testified at a House Education and the Workforce Committee hearing entitled: Examining the Policies and Priorities of the U.S. Department of Education. Regarding the PROSPER Act, DeVos said that she looked forward to working with Congress to advance meaningful reforms, and that the bill aligned with many of ED’s own goals for reauthorization of the Higher Education Act. Regarding the dispute over who has the authority to regulate federal student loan servicers, ED or the States, DeVos reiterated ED’s position that the Federal government should be the sole regulator of servicers of federal student loans. Otherwise, she argued, servicers would be subject to 50 different oversight approaches, which would be burdensome.
Last Friday, the Ranking Members of both the Senate Banking and Senate Education committees sent a letter to the acting director of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney, objecting to his recent decision to shutter the Office for Students and Young Consumers. The letter states, in part, that the dismantling of the office “send[s] a message to students. . . that this Administration will not protect them.” (Please note: the Senators’ letter identifies Leandra English as the acting director of CFPB because there is currently an interagency dispute about who runs the CFPB).
Late last week, ED officially announced the new federal student loan interest rates. For Direct Unsubsidized loans the interest rate will be 6.6 percent, and for Graduate PLUS loans the rate will be 7.6 percent. These rates, which are statutorily tied to the 10-year Treasury note, will apply to loans first disbursed between July 1, 2018 and July 1, 2019. The rates will be fixed for the life of the loan. See a chart of all rates for 2018-2019 federal student loans.
And finally, on Wednesday, May 23, our Director of Policy, Nancy Conneely, joined Managing Director of the AccessLex Center for Education and Financial Capability, Lyssa Thaden, for a Facebook Live Chat on federal policy and its impact on how students finance their education. If you weren’t able to tune in, visit our website to view a recording of their chat.
News You Can Use
The presidents of the American Association of State Colleges and Universities and the Association of Public and Land-grant Universities, Mildred García and Peter McPherson, argue in a joint op-ed that the PROSPER Act would “make college less accessible and more expensive” by modifying or eliminating, among other things, several student loan programs and forgiveness protections.
On Wednesday, the National Center for Education Statistics at the Department of Education released its annual Condition of Education report, which summarizes and analyzes the most recent federal education data. This year’s report found that between 1999–2000 and 2015–16, the percentage of law degree completers who borrowed decreased to 69 percent (from 85 percent), while the average student loan balances increased by 90 percent for those who completed professional doctorate degrees, such as medical and law degrees (from $98,200 to $186,600).
In an upcoming Utah Law Review article, John Brooks, a Georgetown Law School professor, advocates for expanding income-driven repayment to increase college affordability.
The following bills have been introduced this week for consideration by the 115th Congress (2017-2018):
H.R. 5916 – Reducing Excessive Debt and Unfair Costs of Education (REDUCE) Act [Rep. Tom Reed (R-NY)] would, among other things, require colleges and universities to have a plan to keep tuition increases below the rate of inflation, and it requires certain higher education institutions to spend a percentage of their endowments to assist students from working-class families.
H.R. 5928 – Students Over Special Interests (SOS) Act [Rep. Jared Polis (D-CO-)] would repeal the Tax Cuts and Jobs Act and use the $1.9 trillion savings to cancel any outstanding student loan debt for almost all federal student loan borrowers.