The Capitol Recap

Capitol RecapWith reauthorization of the Higher Education Act due for action, members of Congress unveil new proposals for the future of higher education on a continuous basis. NASFAA's series, The Capitol Recap, provides a monthly update on new pieces of legislation introduced in both the House of Representatives and the Senate to provide aid administrators with the most up-to-date information for their offices and their own administration. Bills listed here, unless otherwise noted, have been referred to committee and are awaiting action or consideration.

For a complete list of legislation introduced in this session of Congress, visit the NASFAA Legislative Tracker.

July & August 2019

Campus-Based Programs

  • H.R.3800 - The Educational Opportunity and Success Act of 2019 introduced by  Rep. Davidson [R-OH] would adjust TRIO eligibility criteria to align with FAFSA requirements so that students’ FAFSA information can be used to determine TRIO eligibility. For example, Pell eligibility would be used as a marker for to determine TRIO income eligibility.
  • H.R.4195 - This unnamed bill introduced by Rep. Castro would amend the federal work study program to include child development and early learning as community service eligible opportunities.

Consumer Information and Transparency

  • H.R.4193 - The Student Loan Disclosure Transparency Act of 2019 introduced by Rep. Shalala [D-FL] is a bipartisan student loan transparency bill that would both increase the frequency with which students are provided federal loan disclosures, and add a number of items to the existing list of what servicers must disclose. The bill would also require servicers to add to the pre-repayment disclosure the projected monthly payment amount and the cost of allowing interest to capitalize versus paying interest as it accrues. In addition, the bill also makes several changes to disclosures required during repayment, the first of which is to have these disclosures begin within thirty days of disbursement and to be issued monthly, regardless of whether a payment is due.
  • S.2225 - The BASIC Act introduced by Sen. Harris [D-CA] would require the Department of Education to identify students who may be eligible for public assistance and connect them to those programs. The bill would also create a grant to help institutions identify students who could benefit from public assistance programs. The BASIC Act would define basic needs as food, housing, transportation, child care, health care and technology.
  • S.2405 - The Christopher Bryski Student Loan Protection Act introduced by Sen. Menendez [D-NJ] would require more transparent disclosures by private education loan lenders. The bill would require private education loan lenders to disclose, clearly and conspicuously, a borrower’s and co-signer’s obligations in the event of each other’s death, disability, or inability to engage in any substantial gainful activity. It would prohibit the lender from automatically declaring a performing loan to be in default or take other adverse action if such circumstances arise. It would also require private education loan lenders to automatically release co-signers from their obligations if certain conditions are met.
  • H.R.3761 - The Protecting Access to Student Transcripts Act of 2019 introduced by Rep. Lee [D-NV] would no longer allow institutions to bar students from receiving their academic transcripts if they have defaulted on their student loans.
  • S.2114 - The ISA Student Protection Act of 2019 introduced by Sen. Young [R-IN] would legislation that would establish guidelines and add consumer protections to income-share agreements (ISAs), which are gaining attention as alternatives to traditional student loans, but are currently unregulated. The bill establishes that ISAs are not considered credit, and that ISA providers are not considered creditors, as those terms are defined in the Truth In Lending Act (TILA). Therefore, disclosure and timing requirements under TILA do not apply. The bill sets a minimum income (200% of the Federal Poverty Level), below which ISA recipients would not be required to make payments based on a percentage of their income. The bill specifies that neither funding received through ISAs nor any difference between the ISA amount received and the amount ultimately repaid would be considered taxable income. It also specifies that amounts received from ISAs are not considered income or assets for the purposes of calculating the Expected Family Contribution.

Loans & Repayment

  • H.R.4119 - The To Student Loan Deferment Act introduced by Rep. Lawson, Jr [D-FL] would extend the six-month repayment grace period for all Federal Direct Loans to one year. It also freezes interest rate on these loans during this grace period.
  • H.R.4113 - The Public Service Pays Off Act introduced by Rep. Horn [D-OK] would allow allow borrowers enrolled in the public service loan forgiveness (PSLF) program to have their loan amounts forgiven intermittently at set markers. For example, after completing 2 years of eligible employment as well as making on time, eligible, payments during that time, the borrower would get 15% of the total amount due on their eligible federal loans cancelled. After 4 years another 15%, after 6 years another 20%, 8 years another 20% and after 10 years the remainder, if any of the loan amount would be forgiven.
  • H.R.4079 - The ExCEL Act of 2019 introduced by Rep. Zeldin [R-NY] would eliminate the Direct Loan Program and instead establish an "Income Dependent Education Assistance (IDEA)" Loan Program. The new program would include a universal income-based repayment component with automatic wage withholding as the mechanism for repayment.
  • H.R.3926 - The Consider Teachers Act introduced by Rep. Visclosky [D-IN] would aim to correct the problems within the TEACH grant program that allowed some grants to be inadvertently turned into loans that must be paid back with interest. The bill would also require the Department of Education (ED) to annually, on the same date each year, provide communication with recipients that explains the terms and conditions of the grant, the amount of service ED has counted towards the recipients service obligation, information on the amount of interest that may accrue and that the recipient will be required to pay if such grant is treated as a loan as well as other pertinent information.
  • H.R.3887 - The Student Loan Debt Relief Act of 2019 introduced by Rep. Clyburn [D-SC] would eliminate up to $50,000 in student loan debt for every person with household gross income at $100,000 or less. The bill would also mandate that any forgiveness received would not count as taxable income. Using data already available to the federal government about household gross income and outstanding student loan debt ED would be able to provide automatic cancellation. The bill would also allow private student borrowers to receive loan cancellation by converting their private student loans to federal student loans through student loan refinancing.
  • H.R.3833 -The Streamlining Income-driven, Manageable Payments on Loans for Education (SIMPLE) Act introduced by Rep. Bonamici [D-OR] would attempt to help at-risk borrowers avoid default by helping them enroll in income-driven repayment plans so they can repay based on their financial ability. The bill would use information already on file at the U.S. Treasury to automates the annual process for updating income information while enrolled in these plans.
  • H.R.3793 - The Student Loan Accrual Support and Help Act introduced by Rep. Horn [D-OK] would lower interest rates of all federal student loans, including PLUS programs, disbursed on or after July 1, 2020. The new rate would be equal to the lesser of either the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 or 5%.
  • H.R.3792 - The Guaranteeing Respite After College Ends (GRACE) Act introduced by Rep. Horn [D-OK] would for loans disbursed on or after July 1, 2020, would allow loans that go into deferment to not collect interest during that time as well as interest not accrue for federal loans during the loans “grace” period before repayment beings.
  • H.R.3786 - The Student Loan Reform Act introduced by Rep. Perry [R-PA] would encourage colleges and universities to cosign student loans by allowing participating institutions to offer lower interest rates to student borrowers.
  • H.R.3751 - The No Student Loan Interest Act introduced by Rep. Swalwell [D-CA] would mandate that the Department of Education annually cancel or repay the interest on each federal student loan, and would reduce the interest rate of all federal student loan programs to 0%.
  • H.R.3674 - The Eliminating the Hidden Student Loan Tax Act introduced by Rep. Davis [D-CA], to which a companion bill was introduced in the Senate in June, would eliminate student loan origination fees.

Military and Veterans Aid

  • H.R.4012 - The Safeguarding Student Veterans Act introduced by Rep. Cummings [D-MD] would require the Department of Education (ED) and the Department of Veterans Affairs (VA) to share information about institutions of higher education that specifically target veteran students for enrollment. Institutions who are placed on heightened cash monitoring status would also have their financial and compliance issues shared with the VA.

Pell Grants

  • H.R.4073 - The Expanding Educational Opportunities for Justice-Impacted Communities Act introduced by Rep. Trone [D-MD] would repeal the prohibition on incarcerated individuals to receive Pell Grants, as well as repeal legislation that prohibits students who were convicted of drug-related offenses from receiving federal financial aid. The bill would also ensure that credits earned by incarcerated individuals, if transferred to another institution, in an eligible and equivalent program, would not be treated any differently.
  • S.2123 - The Break the Higher Education Monopoly Act of 2019 introduced by Sponsor: Sen. Hawley [R-MO] would expand the allowable use of the Federal Pell Grant program by allowing it to be used by eligible students pursuing vocational programs, like job-training and certification programs.

Quality & Accountability

  • H.R.4216 - The Strengthening Financial Aid for Students Act (Strengthening FAFSA) introduced by Rep. Delgado [D-NY] would increase financial support for students who are working while attending school. The Strengthening FAFSA Act calls for an increase in Pell Grant lifetime eligibility usage, from 6 years or 12 semesters, to 7 years or 14 semesters. It would also increase the Income Protection Allowance (IPA) by 35 percent.
  • H.R.4216 - The Student and Taxpayer Protection Act introduced by Rep. Takano [D-CA] would reinstate Obama-era gainful employment (GE) regulations that the Department of Education (ED) eliminated last month. The bill proposes that ED revive the practice of tying Title IV eligibility for non-degree-granting programs to their students’ ability to repay their loan debt, or their debt-to-earnings ratios. 
  • H.R.4098/S.2339 - The Higher Education Reform and Opportunity Act of 2019 introduced by Rep. Rooney [R-FL] in the House and Sen. Lee [R-UT] in the Senate would change accreditation rules that would allow any accrediting agency that has an “alternative accreditation agreement” with the Department of Ed to grant accreditation to any postsecondary education program that could be applied to a degree, credential or professional certificate. The bill would also change state accreditation rules to allow flexibility in determining clock-hour and minimum program length requirements for federal student aid eligibility. All undergraduate students regardless of grade level would be able to borrow up to $7,500 each year in federal student loans, for an aggregate amount of $30,000. The Higher Education Reform and Opportunity Act would eliminate loan forgiveness.
  • H.R.4089 - The Second Chance for Students Act introduced by Rep. Foster [D-IL] would allow students convicted of marijuana possession to retain eligibility for six months on the condition they complete an approved drug rehabilitation program and two unannounced drug tests, instead of immediately losing eligibility until the completion of rehabilitation as it stands now.
  • H.R.3921 - The Protecting Academic Integrity Act of 2019 introduced by Rep. Perry would require institutions to disclose any gifts from and/or contracts with a foreign source above $50,000 to the Department of Education. Currently the value at which an institution must disclose a gift or contract is $250,000.
  • H.R.3891 - The Making Education Affordable and Accessible Act introduced by Rep. Harder [D-CA] would authorize the Department of Education to award grants to institutions of higher education to support and/or develop dual enrollment programs.
  • S.2124 - The Skin in the Game Act introduced by Sen. Hawley [R-MO] would require institutions to pay back repay a portion of the loan balance of students who are unable to repay their debt. The bill would require institutions to pay 50% of the balance of student loans accrued while attending their institution for students who default. The bill would also forbid institutions from increasing the cost of attendance to offset the liability.
  • H.R.3662 - The Relief for Defrauded Students Act of 2019 introduced by Rep. McBath [D-GA] would allow students to receive loan forgiveness if they were misled by an institution, and make the borrower defense rule permanent. If the Department of Education approves the borrower defense to repayment appeal, ED must cancel all remaining loan balances, and return any amount the borrower has already paid on the loan.

Tax Issues

  • H.R.4038 - The Workforce Development Through Post-Graduation Scholarships Act of 2019 introduced by Rep. LaHood [R-IL] would allow graduates who receive certain postgraduate scholarships received from charitable foundations to exclude them from their gross income on tax forms.
  • H.R.3803 - The Pell Grant Flexibility Act of 2019 introduced by Rep. DeSaulnier [D-CA] would exclude the amount received in Pell Grant from a recipient’s gross income.

For additional updates on some of these topics, be sure to select related items in the Suggested Content area; you can also sign up to receive email notifications weekly when content has been updated.

Publication Date: 9/4/2019

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