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Senators Press DeVos on FY21 Budget Proposal to Change PSLF, Loan Repayment

March 6, 2020

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

Education Secretary Betsy DeVos testified on March 5 before the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies (Labor-HHS) regarding the president’s fiscal year (FY) 2021 budget request that proposes a 9% cut to the Department of Education (ED) [see Washington Highlights, Feb. 14].

“The proposal is intended to simplify the Federal student loan programs and student loan repayment, establish reasonable loan limits for all Federal student loans, and afford postsecondary institutions more flexibility to help students avoid borrowing more than they will be able to repay,” said Secretary DeVos in her opening statement.

Labor-HHS Ranking Member Patty Murray (D-Wash.) and Sen. Jeanne Shaheen (D-N.H.) criticized the administration’s proposal to eliminate the Public Service Loan Forgiveness (PSLF) program. Sen. Shaheen highlighted how the PSLF “provides an incentive for health professionals to work at nonprofit facilities in rural New Hampshire.”

“How can we incentivize workers to serve in nonprofit facilities if you sunset the PSLF program?” Shaheen asked the secretary.

Secretary Devos restated the administration’s position, responding that they do not believe the government should “favor someone working in one profession or at one facility, over another.” She added that “health care workers who serve at a for-profit hospital deserve the same treatment as those who serve at a nonprofit facility.”

Sen. Lamar Alexander (R-Tenn.) asked the secretary about the implementation of the bipartisan FUTURE Act (P.L. 116-91), which would provide permanent, annual mandatory funding to historically black colleges and universities, simplify the Free Application for Federal Student Aid to 22 questions, and allow for direct data sharing between the Internal Revenue Service (IRS) and the ED [see Washington Highlights, Dec. 12, 2019].

In response, Secretary DeVos said the ED is working with the IRS to implement the FUTURE Act and that the law would reduce administrative burden for borrowers in income-driven repayment plans by eliminating the need for borrowers to annually recertify their income.  

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