On February 9, 2016 President Obama released his Fiscal Year 2017 Budget proposal. The President’s Budget has a clear focus on expanding access, affordability and completion in higher education. In it, he suggests the following changes to higher education:
- Public Service Loan Forgiveness – cap forgiveness at $57,500, the aggregate loan limit for independent undergraduate students.
- Income-Driven Repayment – allow only one option for an income-driven repayment plan, one with terms similar to the current REPAYE plan, for borrowers who originate their first loan on or after July 1, 2017
- InformED – provide funding for a new data initiative, inspired by the College Scorecard, that is aimed at making the Department’s data and research more available and actionable for internal users and the public.
- FAFSA Simplification – remove questions related to savings, investments, and net worth.
- Perkins Loans – increase funding to $8.5 billion and change the interest rates and terms to mirror those of Unsubsidized Stafford Loans. The Federal Government, not institutions, would originate and service the loans.
- American Opportunity Tax Credit (AOTC) – consolidate the Lifetime Learning Credit into an expanded AOTC, which would be available for five years.
The next step in the process is for the House and Senate budget committees to develop their own budget resolutions. From there the appropriations committees will allocate specific funding levels for each federal program. The proposals outlined in the President’s budget, however, stand little chance of being incorporated into either budget resolution.