If this bill passes, college affordability would go from bad to worse
WASHINGTON — A bill proposed past Republicans in the Firm of Representatives could change the college-financing organization dramatically, moving billions of dollars out of financial aid programs.
If H.R. 4508, becomes police, college affordability would become from bad to worse, say many higher education experts, and students from depression-income backgrounds would suffer most.
According to an analysis past the nonpartisan Congressional Budget Part, the net loss of funds to students over the side by side 10 years would exist almost $15 billion if the bill is enacted as written. Other analysts say that figure would be even higher.
The bill, known as the Promoting Real Opportunity, Success, and Prosperity through Instruction Reform (PROSPER) Human activity, would also make more money and regulatory flexibility available to for-profit colleges, many of which accept been cited for high costs, low graduation rates and a history of taking advantage of low-income students and military veterans.
"If enacted, information technology would decimate the loan repayment safety net for low-income borrowers," said Ben Miller, senior director for postsecondary education at the Center for American Progress, a left-leaning think tank. "It would expose students to unscrupulous actors, especially in the for-profit infinite. And it would do nothing to actually accost the real problems nosotros have effectually completion and equity."
The Higher Education Act, commencement passed in 1965 and revised perodically, regulates how the federal government financially assists postsecondary institutions and students. Information technology governs how federal student loans are distributed, who is eligible for federal fiscal aid, how loans must exist repaid and which institutions tin receive federal coin. The PROSPER bill was moved out of commission by House Republicans in December. The Senate is holding hearings to develop its own version.
With the national student debt hovering around $1.iii trillion, lawmakers, parents and students have been crying out for a fix to the higher education lending organisation.
But many run into the new bill'due south proposed fixes as harmful to those who most need the boost toward the center class that comes with a college education. For some, it would make college less affordable birthday; for others, it would add together to the debt burden they would carry after college.
"If enacted, [the PROSPER Act] would decimate the loan repayment safety net for low-income borrowers."
To meet its stated goal of simplifying the many federal grant and loan programs, the House pecker proposes streamlining application processes, which could help students and their families, but also eliminating several of those programs.
Among the proposed cuts are grant programs, including Instructor Teaching Help grants (for those who agree to teach, after college, for four years in a public school serving low-income families) and Federal Supplemental Educational Opportunity Grants (additional grant money for qualified undergraduate students from the everyman income levels).
Related: Overwhelmed past student debt, many low-income students drop out
The bill would also eliminate some loan programs — including a key loan program for graduate students — and some beneficial repayment options. These include the selection for some low-income students to extend their repayment plans (without extra interest) and a program that forgives loans afterward x years of repayment for those working in government or nonprofit public-service jobs.
For-profit institutions, conversely, would benefit from the proposed bill because it would eliminate the ninety-x rule, which currently prevents these institutions from receiving more than 90 percent of their acquirement through federal financial aid. The dominion pushes schools to create programs that enable students to be successful later graduation, because some revenie is coming directly from students or employers. Before the 90-10 rule was instituted, for-turn a profit-colleges frequently enrolled low-income students who had little prospect of earning a caste, obtained those students' federal grant and loan money, and suffered no consequences when the students dropped out or received a substandard instruction.
"A for-profit college could be a hundred percent federally funded," if the PROSPER Act becomes law, Miller said.
"Our proposals offer the same deal for anybody, regardless of occupation, and put down market pressure on institutions to go on costs down."
The nib would also narrow the eligibility requirements for deferment of loans and require those in certain types of payment plans to pay more than previously expected. For example, the percent of what's defined as discretionary income that borrowers must pay under an income-driven repayment program would increase from ten to 15 percentage. And the beak would require even total-fourth dimension students from low-income backgrounds to pay involvement on their federal loans while they are pursuing their degrees. Currently, students are not responsible for any interest while they are in schoolhouse.
"Undergrad students with low expected family contributions should non take to accrue interest while in school," said Jean McDonald Rash, chair of the Higher Instruction Loan Coalition, a group of fiscal aid professionals who work to improve federal loan programs. She said the group has many concerns virtually the bill in its current form.
For example, every bit noted, the new bill proposes ending the Public Service Loan Forgiveness Plan, which benefits students who get into nonprofit fields or regime work and are non probable to earn large incomes.
"We retrieve that'southward very important to attract students into those kinds of fields of study," said McDonald Rash, who'southward besides a director of financial assistance at Rutgers University.
Some believe that with fewer options from the government to pay for schoolhouse, students and educators would have to think more than advisedly about how to finance the cost of a degree. Currently, schools don't have an incentive to lower their prices because students tin can use regime aid to foot the bill, said Mary Clare Amselem, an education policy annotator at the Heritage Foundation, a right-leaning think tank.
"Overwhelming economic evidence is suggesting that heavily subsidizing federal pupil loans has led to college tuition increases," Amselem said. Schools "know that pretty much regardless of what they charge, students are going to be able to find the loans from the federal regime."
Related: Without changes in education, the future of work volition exit more than people behind
Amselem also believes the new bill would push students to borrow from private lenders, which she says is a expert thing. "The federal authorities controls ninety per centum of the student loan marketplace, so they've near crowded out individual lenders," she said. "I think if we had more options for students, we would have a very robust, very competitive marketplace that would offer actually great options for students."
$15 billion — the net amount of coin the Congressional Upkeep Office estimates would be cut from student financial aid in the next decade if the PROSPER Act becomes law
Rep. Virginia Foxx, R-Due north.C., chairwoman of the Business firm Commission on Education and the Workforce, introduced the new bill in December. Information technology was voted out of committee on straight partisan lines and sent for debate in the total House.
"Our proposals offer the same deal for everyone, regardless of occupation, and put downward market force per unit area on institutions to keep costs down," Rep. Foxx said in an emailed argument. "Additionally, the PROSPER Act puts additional funding behind the time-tested cornerstone of fiscal aid for low-income students: the Pell grant."
Pell grants are awarded to students most in demand; to qualify, family income must usually be below $50,000 a year. The maximum grant for the 2018-nineteen school year is $5,920. Under the proposed new pecker, Pell recipients would receive an boosted $300 if they're taking at least 15 academic credits per semester, a provision designed to encourage people to finish college as quickly every bit possible.
The Pedagogy Trust and 34 other organizations — including the NAACP and the National Clan for Higher Admission Counseling — wrote a letter to several members of Congress in which they said the proposed human activity "exacerbates the increasing burden of student debt and connected inequity in college education access and outcomes. It would brand college pedagogy less affordable, saddle students with greater debt, and button more students into loan default."
While a bill this vast — nearly 600 pages — has a number of pros and cons, many say information technology'due south not an even split up.
"There'due south a couple things here and there that aren't bad for depression-income students," Miller said, "merely they are far outweighed by the litany of items that would hurt them."
Sen. Lamar Alexander, R-Tenn., chairman of the Senate Committee on Health, Didactics, Labor and Pensions, has said he hopes to see a bipartisan version by early spring that tin can be recommended to the full Senate.
This story was produced by The Hechinger Study, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up here for our newsletter .
Source: https://hechingerreport.org/gop-education-bill-make-college-even-less-affordable-many-experts-say/
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