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.

February 2021

Campus-Based Programs

  • The Head Start for Our Future Act, introduced by Sen. Castro [D-TX], would add child development and early learning (including Head Start programs and Early Head Start programs) as eligible community service positions for Federal work-study programs.

Improving Affordability

  • The American Rescue Plan Act of 2021, introduced by Rep. Yarmouth [D-KY], set aside $40 billion for higher education to create a new tranche of higher education emergency relief funding. The act stipulates that at least half of the funds must go directly to students in the form of emergency financial aid grants. The act also includes a provision that would close the so-called 90/10 loophole, though this new rule would not go into effect until July 1, 2023 at the earliest.

Loans and Repayment

  • The Stopping Doctor Shortages Act, a bicameral bill introduced by Rep. Harder [D-CA] in the House and Sen. Feinstein [D-CA] in the Senate, would amend the Higher Education Act requiring the Department of Education to allow healthcare professionals who conduct full-time work for nonprofits to qualify for the PSLF program even if they’re not directly employed by a nonprofit organization.
  • The Protecting JOBs Act, a bicameral bill introduced by Sen. Rubio [R-TX] in the Senate and Rep.Ross [D-NC] in the House, would prevent states from suspending, revoking or denying state professional licenses solely due to borrowers being in default on their federal student loans.

Quality and Accountability

  • The POST Act of 2021, a bicameral bill introduced by Rep. Cohen [D-TN] in the House and Sen. Durbin [D-IL] in the Senate, would prohibit for-profit colleges and universities from receiving more than 85 percent of their revenue from the federal government and change the calculation of federal revenue to include all federal funds, including Department of Veterans Affairs GI Bill and Department of Defense Tuition Assistance benefits.
  • An unnamed bill introduced in the House by Rep. Massie [R-KY] seeks to terminate the Department of Education. 

Tax Issues

  • The DEBT Act of 2021, introduced by Rep. Stivers [R-OH], would amend the IRS Code of 1986 to allow employers to contribute up to $10,000 per year to their employee’s student loans as a non-taxable benefit, the current limit is $5,250. The bill would also remove the current $2,500 cap on deductions for student loan interest and allow all interest to be deducted on loan amounts up to $85,000 for single borrowers, and $115,000 for married borrowers. 
  • The Students and Families Empowerment Act, introduced by Rep. Rice [D-NY], would allow all student loan interest to be deducted on loan amounts up to $750,000 as well as eliminates the current income limits on who can claim student loan interest deductions, allowing all individuals to take advantage of the deductions. The bill also allows parent PLUS loan borrowers a twelve month grace period after their student graduates until they need to begin making payments on their loans. 

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: 3/24/2021

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