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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

House Education and the Workforce Subcommittee Holds Hearing on Federal Student Aid

March 31, 2017—The House Education and Workforce Subcommittee on Higher Education and Workforce Development March 21 held a hearing titled Improving Federal Student Aid to Better Meet the Needs of Students. According to a press release from the committee, the purpose of the hearing was to focus on ways to streamline student aid. During the hearing, several witnesses and subcommittee members raised questions about the Public Service Loan Forgiveness (PSLF) program.

Testifying witnesses included: JoEllen Soucier, executive director of financial aid, Houston Community College System; Kristen Conklin, founding partner, HCM Strategists; Youlonda Copeland-Morgan, vice provost of enrollment management, UCLA; and Matthew Chingos, PhD, senior fellow, Urban Institute.

Subcommittee Chair Brett Guthrie (R-Ky.) opened the hearing by calling for the simplification of student aid, stating, “We need to get rid of the complexity. We need to eliminate the confusion students face. And there are a number of ways we can do both.” Explaining the approach, he said, “It's not about cutting, it's about cleaning things up, making it easier for individuals to explore their options, find the right school, figure out how to pay for their education, and determine the best way to repay their loans.”

Noting that students are taking out larger loans, Subcommittee Ranking Member Susan Davis (D-Calif.) recognized the system must be improved so “students have access to favorable terms and streamlines income-driven repayment plans.” However, Rep. Davis pointed out, “As our country fully shifts to a knowledge-based economy, workers with graduate degrees are increasingly sought after. But throughout the years, graduate students have been excluded from the federal loan system. If we want all students to have access to high-paying jobs, Congress must preserve access to these loans as well.”

Rep. Joe Courtney (D-Conn.) cited the National Health Service Corps (NHSC) as an example of PSLF and asked if PSLF were a beneficial program. Mrs. Copeland-Morgan stated, “I think [PSLF] is a good thing…we need to find ways of encouraging young people to go into these large areas of needs within our states and within their communities.” Rep. Courtney agreed but pointed out, “From Connecticut, it was a bitter lesson about the fact that this is one of the most critical areas of our health care system that is just alarmingly understaffed across the country. And again, if there's fixes that are needed in the programs, you said, you know, let's deal with that. Let's not just eliminate what I think has been a really healthy way to get underserved occupations, as well as regions of the country, critical public service jobs.”

Dr. Chingos argued an opposing view in his opening statement, “Forgiveness should only be a provided as a last resort and the public service loan forgiveness program should be eliminated. Policymakers seeking to subsidize employment in certain sectors of the economy should do so directly, rather than through loan forgiveness.”

Rep. Adriano Espaillat (D-N.Y.) followed-up with Dr. Chingos on student loan forgiveness programs, “Communities that don't have the adequate health care often resort to loan forgiveness programs to bring in doctors and nurses that will help them become healthy again.” Rep. Espaillat argued that loan forgiveness is “essential and basic” to neighborhoods facing challenges. “In some cases, we have had to go abroad to bring qualified teachers to our school districts. And we have had to go abroad to bring medical professionals to our neighborhoods.”

When Chairman Guthrie raised the “Bennet Hypothesis,” the idea that student aid drives tuition increases, Dr. Chingos highlighted graduate programs,, “Federal policymakers ought to be most concerned about situations where the federal funding footprint is the largest. So cases like with graduate loans, where graduates can borrow up to the total cost of attendance, no questions asked. I think we ought to be concerned there. And I think we ought to be concerned at institutions where federal grants and loans make up a very large share of student aid.”

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116
Email: mshick@aamc.org

Joseph Bañez
Legislative Analyst
Telephone: 202-739-2995
Email: jbanez@aamc.org

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org