House education bill may cause big changes for college financial aid

Kailey Love|Photo Editor
A GOP-sponsored education bill could lead to new changes for colleges and students.

Kailey Love | Photo Editor

01/11/18

UPDATE: 01/17/18 Correction of Rep. Foxx’s name. Only one x had been used in the last sentence.

Shortly before Christmas on Capitol Hill, several House Republicans compiled a 542-page bill that would significantly change how Duquesne students, and students nationwide, fund their education.

On Dec. 1, 2017, House Republicans proposed an overhaul of the Higher Education Act of 1965 — a law that determines the entire federal aid system — in an attempt to to minimize the role of government in education. As dictated in this act, reauthorization should occur every five years.

This proposal, coined Promoting Real Opportunity, Success, and Prosperity through Education Reform Act (or, the PROSPER Act) is the first significant legislative move toward reauthorization in the past 10 years, having already moved through committee on Dec. 12 and advancing to the House floor for a full vote.

In her opening statements when introducing the bill, Rep. Virginia Foxx (R-NC), chairwoman of the House Education and Workforce Committee, stated, “Lifelong learning is the root of all innovation, which, in this country, has always been the foundation for real prosperity.

“No bill is perfect when it begins its course through the legislative process, and we can all agree that no bill is perfect when it reaches the end of the legislative process,” she said. “But we are here today because we cannot allow the status quo to continue.”

The speed in which this bill is advancing through Congress has drawn criticism and concern from Democrats and the American Council on Education (ACE).

The organization feels that the markup process in which the bill underwent a 14-hour debate period in the House Education and Workforce Committee (moving forward after a vote of 23-17 along party lines) was too fast to assess the full impact that the bill would have on students and their families.

In a letter to Chairwoman Rep. Foxx, Chairman Rep. Brett Guthrie (R-KY) and ranking members Rep. Bobby Scott (D-VA) and Rep. Susan Davis (D-CA), the ACE, along with 36 other organizations voiced their concerns about the bill’s momentum.

“Despite the fact that reauthorization is already several years behind schedule, this bill is suddenly being rushed through committee,” they said.

“This expedited time frame limits the ability to analyze the bill and consult with affected parties, leaving the committee in the position of asking its members and the public to support legislation before knowing its full impact. We urge you to delay marking up the bill to allow for more input.”

Amongst the proposed changes in the bill, there are a few amendments that have received bipartisan praise. The elimination of student loan fees, raising the Pell Grant award for students taking more than 15 credits per semester, simplification of the application process for financial assistance, incentivising four-year graduation periods and an addition of work study opportunities have been been cited as positive potential changes for federal aid law.

The proposed legislation would also raise the borrowing cap for undergraduates from $31,000 to $39,000, however it would cap the previously unlimited borrowing for graduate students (which would be capped at $150,000) and parents (capped at $56,250).

Despite these measures, there is still much concern surrounding the amendments in the bill that would limit loan forgiveness and reduce the number of loan repayment plans from eight to two (one standard ten-year plan, and an income based plan).

This bill would also end the Federal Supplemental Educational Opportunity Grant (SEOG), which is a $732 million dollar grant reserved for students with the greatest financial need. According to the Department of Education, 1.6 million students received aid from this program in the 2014-2015 academic year.

In their analysis, ACE estimated that at least six million students would be affected by this bill in its current state. Without the subsidized loans, their analysis found that for a standard four year program in which an undergraduate would borrow $19,000, the cost of the loan would increase by 44 percent, even with all the payments made on time.

“The primary goal of any reauthorization should be improving federal programs that support students. However, by any metric, this bill is worse for students. If enacted, students would need to borrow more, pay more to borrow and pay still more to repay their loans,” ACE stated in their letter.

John Falleroni, senior associate director of financial aid at Duquesne, weighed in on the impacts of the PROSPER Act, saying he believes it “may be three steps back and only a step forward.”

“I have been very fortunate to sit on government relations committees and a financial aid policy team,” he said. “I have gone to Washington to discuss financial aid issues with legislators and staff for the past six years. My sources from those committees seem to think that reauthorization will probably not occur until late 2018 at best.”

Falleroni cited the elimination of origination fees, increase of the Stafford loan and the introduction of the “Super Pell” as advantages in the bill, stating that “these are things that have been brought up by the financial aid community, and these are good changes.”

However, he listed the end of subsidized loans for undergraduates, the introduction of caps on borrowing for parents and the elimination of the SEOG, public service loan forgiveness and PLUS loans for graduate students as concerns.

“On one hand, it is very early in the process. However, I am still very concerned,” he said. “The PROSPER has been rushed through with very little bipartisan support. It is extremely bold … if this version did pass the House and Senate, the impact would be huge.”

Due to the partisan attitude that has prevailed on the hill as of late, Falleroni said that “the [political] climate may not allow it to go forward” and “bipartisan just generates better ideas.”

Additionally, last minute provisions added late in the markup process invoked widespread criticism as well, such as preventing schools from taking punitive actions against members of fraternities, sororities and other “single-gender” organizations, and adding language that would counteract certain parts of Title IX and limit student’s free speech on campus.

Under the PROSPER Act, school counselors or designated employees would not be required to report any incident involving sexual assault to campus administration as dictated under Title IX’s reporting requirement and any disciplinary measures that could be placed on offenders by the college could be postponed while law enforcement conducts their own investigation.

If passed, this provision could lead to a potential underreporting of sexual assault. When asked about this provision, Falleroni said that it struck him as “odd” or “strange.”

“For something that is supposedly ten years in the making … it’s hard to digest all of that, and it is hard to react to all of it. That’s the thing that concerns the financial aid community most. You need time for these things,” he said as an overarching statement on the bill. “Because it has gone through so quickly, we can’t decide where we’ll be at with all of these things going on.”

Rep. Foxx declined to comment and referred to her previous statements.

One Response to "House education bill may cause big changes for college financial aid"

  1. Ryan W  January 15, 2018 at 10:29 am

    Could you clarify about the subsidized student loans, are they taking those away?

    You stated “In their analysis, ACE estimated that at least six million students would be affected by this bill in its current state. Without the subsidized loans, their analysis found that for a standard four year program in which an undergraduate would borrow $19,000, the cost of the loan would increase by 44 percent, even with all the payments made on time.”

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