In December, the House education committee introduced a comprehensive bill to reauthorize the Higher Education Act of 1965 (HEA)—the primary law that authorizes federal student aid programs for higher education. As the National Association of Student Financial Aid Administrators (NASFAA) explains in its new policy issue brief, the bill — dubbed the Promoting Real Opportunity, Success and Prosperity Through Education Reform (PROSPER) Act — includes several noteworthy changes to the federal student aid programs that deserve the support of the higher education community, others that raise questions, and others that should be abandoned altogether. The brief follows up on a letter NASFAA sent to lawmakers in December.
The PROSPER Act contains a number of provisions that bolster college access and simplify student loan borrowing and repayment processes. For instance, the bill proposes instituting a Pell Grant bonus, which would encourage students to enroll in additional coursework if capable, and eliminating student loan origination fees, which are essentially a tax on students collected by withholding a portion of the loan proceeds. The bill also paves the way for a dramatic increase in Federal Work-Study spending.
Unfortunately, the PROSPER Act would also eliminate a number of critically important federal student aid programs. Proposed for elimination are:
The bill also fails to include an increase to the Pell Grant maximum award and does not return the annual inflation-based increases to the maximum award.
The PROSPER Act has cleared the House education committee and could hit the House of Representatives floor as soon as next month. NASFAA is strongly encouraging its members to examine how these proposals would impact students on campus and contact their elected officials to share their unique on-the-ground perspectives.
To speak to a NASFAA policy expert, or a practicing financial aid administrator, about the ins and outs of the PROSPER Act’s student aid provisions, email NASFAA Director of Communications Erin Powers at [email protected].
Publication Date: 1/24/2018