This Week In Washington
Yesterday, by a vote of 216-212, the House passed the Senate’s version of the Fiscal Year (FY) 2018 budget resolution. This is significant because, unlike the original House plan, the Senate’s resolution did NOT contain reconciliation instructions to the chambers’ respective education committees to find savings. This means that the potential harmful changes to federal financial aid programs cannot occur through the budget reconciliation process this fiscal year.
However, Congress could still cut some programs through a potential forthcoming negotiated budget deal. Recall in September, the President and Congress agreed to keep the government funded until December 8th, but that time is approaching, and any manner of policy addendums could be attached to the government spending deal. In 2011, under the Budget Control Act, subsidized loans for graduate students were eliminated to fund increases for non-defense discretionary spending. We could see programs like Public Service Loan Forgiveness or income-driven repayment plans changed to help fund other priorities. We will keep you informed as we learn more.
On Tuesday, Education Secretary, Betsy DeVos, further delayed implementation of new borrower defense to repayment (DTR) regulations until 2019. These new rules would have made it easier for students to receive a discharge of their federal student loans if they were defrauded by institutions, as well as ban forced arbitration clauses between schools and students. Earlier in the year, DeVos first delayed the rules, citing a flawed rulemaking process, and subsequently announced the Department of Education (ED) would engage in a whole new rulemaking process.
This negotiated rulemaking process is scheduled to start on November 13th and will continue for several months. The negotiators have been (subscription required) selected and include officials from for-profit colleges, consumer groups and nonprofit schools. DeVos cited the new process and legal challenges as the reasons to extend the implementation delay. An older set of DTR regulations exist, but no claims have been processed under this administration.
News You Can Use
Campus officials say that eliminating the Perkins Loan program won’t simplify the federal student loan system, but could lead students at some institutions to take out private student loans.
Colleges are providing students with detailed information on their finances to help students make better informed decisions on how to manage their money while they are in school and after they graduate.
With 87,000 DTR claims pending, ED is considering granting partial relief to defrauded student loan borrowers.
The following bill was introduced this week for consideration by the 115th Congress (2017-2018):
H.R. 4119 – Student Loan Disclosure Modernization Act [Rep. Luke Messer (R-IN)] would require certain student loan disclosure forms to be simplified and consumer-tested to make them easier to understand and would require students to sign the form every time they take out a new loan.