A group of Republican senators on Wednesday introduced the Lowering Education Costs and Debt Act, a package of five bills aimed at lowering the rising costs of higher education and rising amount of student loan debt.
The group, led by Sen. Bill Cassidy (R-La.), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, held a press conference outlining the bill package on Wednesday. Cassidy said unlike President Joe Biden’s student loan debt cancellation plan, this package “addresses the root causes of the student debt crisis.”
“Our legislation puts downward pressure on tuition,” Cassidy said during the press conference. “It empowers students to make educational decisions that put them on the track to both academically and financially succeed. It simplifies the student loan borrowing and repayment process so students don't have to take out more loans than they need and can navigate the student loan process.”
Specifically, the lawmakers said their bill package would provide students and families with better information to choose the college program with “the best return on investment.” The group adds that the legislation would simplify the student loan borrowing process.
The package contains five bills, including both new and reintroduced legislation from Cassidy and Republican Sens. Chuck Grassley (Iowa), John Cornyn (Texas), Tommy Tuberville (Ala.), and Tim Scott (S.C.).
Part of the package is Cassidy’s College Transparency Act, which has bipartisan support from Democrats, including Sen. Elizabeth Warren (D-Mass.), and is supported by NASFAA. The legislation would create a user-friendly website for students and families with reports on student outcomes including enrollment, completion, and post-college success across colleges and programs. Institutions would be able to report privacy-protected, student-level data to the National Center for Education Statistics, among other things. This legislation was reintroduced in April this year.
The package also includes Grassley’s Understanding the True Cost of College Act, which would require institutions to use a standardized financial aid offer. On the aid offer form, certain information would need to be included, such as cost of attendance; grant aid; the net amount a student is responsible for paying after subtracting grant aid; work study assistance; eligible amounts of federal student loans; information on calculating the costs of repaying student loans; disclosures related to private loans and parent loans, treatment of scholarships; and the terms and conditions of federal financial aid.
The Department of Education (ED) would also be called on to work with institutions, consumer groups, students, and others to develop standard definitions of financial aid terms. ED would also need to establish a process to consumer test the uniform financial aid offer form, Grassley states. NASFAA previously covered the details of the legislation in 2019, when it was first introduced.
NASFAA, who has supported other legislation to improve financial aid offers, joined with the leaders of nine other higher education organizations last fall to form the Paying for College Transparency Initiative, which will create a set of guiding principles and minimal standards to be used when developing aid offers.
“The Biden administration’s plan to forgive student debt would only transfer the burden of repayment onto American taxpayers, costing them billions of dollars,” Grassley said in a statement. “That’s an outrageous approach to the student debt crisis. It’s as effective as closing the barn door after the horses have already gotten out. Our legislative package takes a proactive approach by informing students and their families of their best options, and I’m proud to see my legislation included in the package.”
New legislation included in the package is the Informed Student Borrowing Act, introduced on Wednesday by Sen. Steve Daines (R-Mont.). The bill would, among other things, require that bowers receive student loan entrance counseling materials or actively participate in entrance counseling each award year. The counseling materials would include information such as sample monthly repayment amounts based on the 10-year standard repayment plan, completion rate for undergraduate borrowers, the median annual earnings for students who attended the institution and specific program, and more are also included.
The legislation would also require student borrowers and parents to manually enter the amount of money they wish to borrow annually to the financial aid office before any master promissory note is signed or loan is disbursed.
The Streamlining Accountability and Value in Education (SAVE) for Students Act, introduced by Cornyn on Wednesday, would consolidate existing plans into only two student loan repayment plans. The first would be a 10-year standard repayment plan and the second would be the REPAYE+, an income-driven repayment plan that provides earlier forgiveness for low-income, low balance undergraduate borrowers, Cornyn states.
The legislation would also prohibit new federal student loans to pay for undergraduate programs where half of the former students are unable to earn a salary higher than the median high school graduate. New federal student loans would also be prohibited from being used to pay for graduate programs where half of the former students are unable to earn more than a median bachelor’s degree recipient.
Additionally, the legislation would not allow ED to create additional student loan repayment plans without congressional approval and terminate the Biden administration’s proposed income-driven repayment plan.
The Graduate Opportunity and Affordable Loans (GOAL) Act, introduced by Tuberville on Wednesday, would end Graduate PLUS loans and would separate undergraduate aggregate loan limits from graduate Stafford loan limits. This would allow students’ undergraduate borrowing to no longer affect their ability to borrow for graduate school, Tuberville said. Institutions would also be able to set loan limits for their programs.
Additionally, for graduate degrees, the legislation would maintain the annual unsubsidized Stafford loan limit at $20,500 and establish an aggregate unsubsidized Stafford loan limit capped at $65,000. For professional degrees, the annual unsubsidized Stafford loan limit would be capped at $40,500 and the aggregate unsubsidized Staford loan limit would be capped at $130,000.
Stay tuned to Today's News for more developments concerning this legislative package.
Publication Date: 6/15/2023