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  • Washington Highlights

    House Democrats Introduce Comprehensive Higher Education Act Reauthorization

    Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs
    Brett Roude, Legislative Analyst

    House Education and Labor Committee Chair Bobby Scott (D-Va.) Oct. 15 introduced the College Affordability Act (CAA, H.R. 4674) to reauthorize the Higher Education Act (HEA), which governs programs at the Department of Education, including federal student loans.

    The CAA would retain medical students’ ability to borrow up to the full cost of attendance through GradPLUS loans [see Washington Highlights, June 28]. The legislation clarifies eligibility for the Public Service Loan Forgiveness (PSLF) program by including physicians working at a nonprofit hospital or other healthcare facility in states that prohibit the direct hiring of physicians at such facilities.  Additionally, the bill allows borrowers who are in the wrong repayment plan or were initially rejected from PSLF to reapply for forgiveness and directs the Education Secretary to create a program that improves the implementation and borrowers’ understanding of PSLF.

    In an attempt to simplify federal financial aid, the bill would create two repayment options: a fixed repayment plan and an income-based repayment (IBR) plan. The fixed repayment plan automatically places borrowers with loans over $40,000 in a 20-year repayment plan with equal monthly payments, with the option of entering a 10 or 15-year repayment plan. 

    The IBR plan would require borrowers to pay 10% of their discretionary income, regardless of their salary, and would forgive any outstanding loans after 20 years of repayment. Under current law, IBR monthly payments are capped at 10-year standard repayment plan levels. The legislation would allow automatic recertification of income for borrowers enrolled in IBR plans, using IRS information to determine income levels. The bill would also allow any current borrowers who have federal or private loans to refinance their loans under one of the newly authorized repayment plans.

    The CAA would make other changes to student financial aid, including:

    • Eliminating origination fees;
    • Granting access to Pell Grants for graduate and post-baccalaureate students;
    • Expanding Title IV financial aid eligibility for DACA recipients;
    • Simplifying the Federal Free Application for Federal Student Aid (FAFSA); and
    • Reauthorizing the Perkins loan program, which expired in 2017.

    Other provisions in the CAA include:

    • Requiring in-kind gifts to be reported;
    • Providing institutions with clear guidelines and requirements for reporting foreign gifts;
    • Restoring the gainful employment statutes recently lifted by the Department of Education; and
    • Prohibiting the Education Secretary from issuing or enforcing the sex discrimination rules proposed in November 2018 or any substantially similar regulations [see Washington Highlights, Feb. 8].

    While the House works on comprehensive HEA reform, Senate Health, Education, Labor, and Pensions Chair Lamar Alexander (R-Tenn.) continues to advocate for the passage of the Student Aid Improvement Act (S. 2557). The Student Aid Improvement Act includes small bipartisan changes to HEA,  but it is not a comprehensive HEA reauthorization [See Washington Highlights, Oct. 4].

    It is being reported that Chair Scott hopes to pass the CAA before the end of the year.