WILMINGTON, DELAWARE – AUGUST 20: Democratic presidential nominee Joe Biden delivers his acceptance … [+]
The Higher Education Act of 1965 has been transformative. It determines Pell Grants and Stafford loan details, and provides funds for student research, program initiatives, scholarship programs, international education, and accreditation of institutions and programs, as well as oversight of teacher preparation programs. It was supposed to be renewed every five years, but it was last renewed in 2008 and has continued with temporary extensions.
There is a movement to try to tackle the renewal process this coming session of congress. Various proposals have been put forth. President Biden and Senator Bernie Sanders have offered proposals which focus on increasing government funding and reducing costs for lower- and middle-income Americans.
President Biden’s proposals for the renewal of the Higher Education Act include:
- Cutting the discretionary income required for monthly repayment from 10% to 5%
- Allowing those earning less than 225% of the poverty rate to be excused from making student loan payments
- Dropping the requirement of continuous loan payments from 20 years to 10 years to forgive loans under $12,000
- Not charging borrowers for unpaid monthly interest
Independent Senator Bernie Sanders has proposed:
- Free Community College and public vocational schools
- Doubling of the Pell Grant
- Free public college for low- and middle-income families
- Doubling investment in minority-serving institutions
- Increased funding for assistance and guidance for low-income individuals, first-generation college students, and the disabled.
Five Republicans have introduced legislation as well, described by Jon Fansmith, Senior Vice President for government relations at the American Council on Education, in Inside Higher Ed, as “moderate, reasonable and pragmatic.”
The Republican proposals include:
- Caps on loans for graduate school
- Fewer repayment options
- Loan forgiveness in 10 years for those with low balances
- New accountability rules for undergraduate and graduate programs, focused on future earnings of graduates
- Standardized disclosure of costs and aid, including a uniform financial aid letter.
- More information to college and graduate students about academic programs, schools, job outcomes, and loan repayments.
Interestingly, there are a few provisions, noted by Preston Cooper in Forbes, where there is agreement between the Republican and President Biden’s proposals. Both bills would automatically enroll delinquent borrowers in the income-driven repayment plan and offer earlier forgiveness for borrowers with low balances.
It is unclear which, if any, of these proposals will make it through a divided congress. These combined, though, are positive steps in the right direction.
Independent of these bills, the Education Department has instituted a number of changes to the Free Application for Federal Student Aid (FAFSA) for 2024 that can have a significant impact on students attending college.
FAFSA changes taking place include
- Allowing students to know their Pell eligibility before filling out a FAFSA
- Allowing incarcerated individuals to access the Pell Grant
- Adding a broadband allowance to the formula
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