McConnell Seeks Exception to Rules for School

"Senate Majority Leader Mitch McConnell is asking the Education Department to skirt its rules and make an exception to provide federal dollars to a college in his home state –– even though a high percentage of its graduates defaulted on their students loans for the last three years," CQ Roll Call reports.

"McConnell’s move is part of a larger debate about the criteria to determine whether a college should receive federal funding or be cut off. Currently, the Education Department uses data on what is known as the cohort default rate — or how many of a college’s graduates default on their loans — to decide whether the school is a good investment for taxpayer money.

Some lawmakers have said schools with high student loan default rates should lose federal funding. But McConnell, as well as the Obama administration and loan experts, have questioned whether that method takes the school’s circumstances into account.

... McConnell isn’t the first federal official to attempt to give schools with high default levels a break. In 2014, the Obama administration tweaked the default rates for some colleges at risk of losing their funding by not counting graduates who held multiple loans and had only defaulted on one.

Other factors can affect a school’s default rate.

Graduates can use methods to avoid defaulting on loans while not being able to make progress on paying them off. And there are other factors, including what type of students attend a school, how many borrow money and the average level of debt, said Justin Draeger, president of the National Association of Student Financial Aid Administrators.

'What Sen. McConnell is getting at is something that folks have been talking about for a long time,' Draeger said. 'Anytime you take a hatchet to enact some sort of federal policy, the result is not going to be nuanced.'"

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 10/10/2017

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