"House Republicans on Friday proposed a sweeping overhaul of a federal law that governs almost every aspect of higher education, a plan that would eliminate some popular student aid programs and impose restrictions on others," The Washington Post reports.
"The legislation seeks to reshape higher education by limiting the federal role in a way that Republicans say will make colleges and universities more responsive to the needs of employers, while reducing taxpayers’ stake in the financing of education. The bill is the first significant step in the reauthorization of the Higher Education Act of 1965, and some provisions are already being met with resistance.
House Republicans want to whittle the suite of eight student loan repayment plans down to two: one standard 10-year plan and one income-based plan. As it stands, people can opt to have their monthly loan payment capped to a percentage of their earnings, with the remaining balance of the debt forgiven after 20 to 25 years. The House plan would eliminate that loan forgiveness, but cap the interest payments on the loan after 10 years.
'It’s a very regressive and punitive change,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators. 'The cap provides some insurance that your costs will never exceed a certain amount of money. It’s useful and worth exploring, but taking away any form of loan forgiveness is a big penalty.'
Getting rid of loan forgiveness would address some concerns about the cost of the program. A 2016 study by the Government Accountability Office estimated that the popular repayment plans would cost at least $108 billion for loans made from 1995 to 2017. To lower the expense, critics have called for caps on the amount of graduate student debt eligible for forgiveness."
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: 12/1/2017