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  • Washington Highlights

    Senate Committee and Agency Reports Keep Federal Student Aid Programs in the Spotlight

    Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs

    Republican and Democratic leadership of the Senate Health, Education, Labor, and Pensions (HELP) Committee released guiding framework on reauthorization of the Higher Education Act (HEA) and held its fifth hearing in a series on HEA [see Washington Highlights, Feb. 2]. Concurrently, the Department of Education Office of Inspector General (OIG) and the Congressional Budget Office (CBO) issued reports about federal student aid programs.

    HELP Committee Chair Lamar Alexander (R-Tenn.) Feb. 1 released a white paper centered on accountability standards within the federal loan programs, including raising questions with cohort default rates, the 90-10 rule, and gainful employment. Similarly, HELP Committee Ranking Member Patty Murray (D-Wash.) Feb. 2 also put out guiding principles for HEA reauthorization. The Senate Democratic Caucus document is primarily focused on ensuring college access and affordability, tackling student debt, and keeping students safe on campus.

    Continuing on their examination of HEA reauthorization, the Senate HELP Committee held a Feb. 6 hearing on “Improving College Affordability.” The discussion focused on the “Bennet Hypothesis” – an idea that increases in federal student aid lead to increases in tuition. Chairman Alexander hinted at his thinking in his opening statement, “While it is never easy to pay for college, it is easier than many think, and it is unfair and untrue to suggest that for most students, college is out of reach financially.” In her opening statement, Ranking Member Murray reiterated her interest in working on a compromise with Chairman Alexander but also questioned, “Will this reauthorization of the Higher Education Act leave students better off?”

    While Congress continued talks around reauthorizing HEA, the OIG Jan. 31 sent the Department of Education an audit report that shows increased growth in participation in Income-Driven Repayment (IDR) plans and loan forgiveness programs. The OIG report states, “Further increases in students using IDR plans could result in the federal government and taxpayers lending more money overall than is being repaid by borrowers in future cohorts.”

    Both IDR and loan forgiveness are targeted in the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act (H.R. 4508), sponsored by House Education and Workforce Committee Chair Virginia Foxx (R-N.C.) [see Washington Highlights, Dec. 15, 2017].

    According to a report released Feb. 6 by the Congressional Budget Office (CBO), the PROSPER Act would provide about $14.6 billion in savings in direct spending as a result of changes to federal student aid. In response to the report, Ranking Member Bobby Scott (D-Va.) said, “The CBO’s score of H.R. 4508 confirms what we already knew to be true – this bill makes college more expensive for America’s students and working families.” He continued, noting strong bipartisan support for Public Service Loan Forgiveness, and adding, “Any suggestion that this bill is budget-neutral or does not cut available aid to students is false.”