While Senate Republicans last week hashed out the details to pass a bill that would hike taxes for the middle class in order to slash them for corporations, House Republicans unveiled a higher education bill that would broadly reshape how the federal government pays for and regulates college — by cutting back on various student aid programs while also lifting current regulations that require for-profit colleges to meet certain thresholds to receive tax dollars.
Reps. Virginia Foxx, R-N.C., and Brett Guthrie, R-Ky., of the House Committee on Education and the Workforce on Friday introduced the bill, titled the Promoting Real Opportunity, Success, and Prosperity through Education Reform, or PROSPER, Act. Foxx, who chairs the committee, and Guthrie are the point people for House Republicans when it comes to higher education policy and will now start looking for co-sponsors for the bill, which has a long road to passage.
House Democrats, for their part, have not introduced legislation as a comprehensive alternative, but progressives have been enlisting co-sponsors for the College for All Act, which would make public colleges and universities tuition-free.
The 542-page Republican bill would have a wide-ranging impact on higher education, but two of the proposals stand out for their immediate impact on students and colleges: reductions in traditional aid programs and rollbacks of regulations limiting federal funding to for-profit colleges.
The bill would, for instance, completely eliminate the Public Service Loan Forgiveness program, which forgives student loans for borrowers who work for a nonprofit or in a state, local, or federal government job and make 120 qualifying monthly payments over a period of 10 years. More than half a million borrowers have utilized the program since 2007 to help them deal with student debt. Gregory Crespi, a Southern Methodist University law professor who studies the program told the ABA Journal that roughly a quarter of jobs in the U.S. economy would be considered public interest jobs.
The legislation would also consolidate the student financial aid system, shifting it toward a “one grant, one loan” model, which could threaten subsidies offered to borrowers. It would also introduce caps on graduate student loans.
University of Southern California Law School professor Michael Simkovic wrote in a blog post that he worries such caps could would be most beneficial to the private lending market.
“These measures, if enacted, would be a boon to private student lenders like Sallie Mae, who would be able to both increase their prices and increase their market share as federal student loans become less competitive and less available,” Simkovic wrote. “Consequently, expected financing costs for students will likely increase, to the detriment of both students and educational institutions.”
It would possibly also shortchange the government.
“According to a study by the Government Accountability Office and the Department of Education, loans to graduate and professional students are the most profitable in the government’s portfolio — even after income-based repayment and debt forgiveness,” he noted. “Capping loans to these attractive borrowers may reduce the overall profitability of federal student lending and pave the way for arguments for more cuts to federal lending in the future.”
Debbie Cochrane, vice president of the Institute for College Access Success, pointed out in a statement that the bill would also “start charging millions of low- and middle-income students interest on all of their loans while they’re still in school, adding thousands of dollars to students’ loan balances.”
While curbing certain forms of student aid, the bill would also loosen the purse strings on federal dollars to for-profit colleges by eliminating certain regulations.
For instance, it would do away with the so-called “90/10 rule.” Under this rule, for-profit colleges are barred from receiving more than 90 percent of their revenues from Department of Education Title IV federal aid, which includes various loan and grants programs.
It would also eliminate gainful employment rules. These regulations from the federal government establish minimum thresholds in terms of the debt-to-income ratios of the graduates of for-profit colleges. Colleges that do not meet this threshold therefore become ineligible for federal aid.
“Where students are the losers under this proposal, the clear winners are for-profit colleges. By gutting regulations designed to ensure that schools provide the education students have paid for, this bill would have the taxpayers write a blank check to colleges that overcharge and under-deliver,” Cochrane said in a statement.
Top photo: President Donald Trump reacts with Rep. Virginia Foxx, R-N.C., before signing a memorandum to expand access to STEM, science, technology, engineering and math, education, in the Oval Office of the White House Sept. 25, 2017, in Washington.
Does anyone have an idea how this would affect people currently in the program? I’m in PSLF and the program is written into my Promissory note, which is a legally binding document.
Hi, do you know who I can write to opposing this bill?
Can anyone say “conflict of interest “ ? For-profit colleges receiving funding. Sounds like another way to land tax dollars in the pockets of lawmakers. I’ve advised my children to leave this country
Why should pay for students loans? or why should paid intensives for private business
I recently found tried to enroll in this and found out you have to be in a 10 year repayment plan anyway. What are they forgiving if you have to make 10 years worth of payments to be eligible?
If you are on an income based repayment plan, you would not have to pay the full amount of your loan in the 10 years, and the remaining balance would be forgiven. This is for people who have accrued $50,000+ in debt through schooling for professions that are vital but underpaid. Otherwise these people would be tied to payments for decades.
Because you only have to pay 10% of your monthly income for 10 years. most people’s student loan monthly payments are more than 10% of their monthly income in order to pay them off in 10 years. For example, my brother works for the government and his monthly payment went from $800/month to a little over $200. Still have to pay for 10 years, but pay a lot less each month.
Student loan forgiveness? Since when is Wall Street forgiving student debt?
Student loans create future slaves of capitalism !
And they’ll find DINO’s to help the pass this crap.
I think the time has come to bring the pitchforks into the streets. It is WAY PAST TIME for THIS:https://www.youtube.com/watch?v=jmLthd5Bvf4
Although I agree with you on principal, I would not like to see a fight between pitchforks and drones.
May that “principle” not “principal” – duh!
Oh good. Just when I thought I wouldn’t get to enjoy the full college experience, they threaten to slam me with five years of debt before I could hope to get a job in my field.
I am giving increasingly fewer shits about staying in the US, so if their goal was to drive out science majors, mission accomplished?
It is all in the plan of keeping the population stupid while still fleecing them.
Great idea! Keep them stupid, poor and hungry, then scream that you’re the best country in the world and send them off to war to protect Wall Street’s interests in everything that’s not theirs. Or better yet, force them all to attend Trump University and pay for this own costs.
It’s a Saturday day. He doesn’t care!