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Category: Student Aid

The Week Ahead

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This week lawmakers continue to debate FY2015 appropriations, student loans, and VA reform.

Tonight, the House will vote on S. 1254, the Harmful Algal Bloom and Hypoxia Research and Control Amendments Act of 2013. The bill would authorize $20.5 million annually through 2018 for the National Oceanic and Atmospheric Administration to reduce the effects of algal blooms and hypoxia in bodies of water.

By mid-week, the Senate will turn its attention to a bill that would allow the nearly 40 million people with more than $1 trillion in student loans to refinance to current lower interest rates. The student loans bill is part of Senate Democrats’ “fair shot” 2014 agenda that included an unemployment insurance extension, minimum wage increase, and pay equity for women. But it is unlikely that enough Republicans will join Democrats to advance the bill, which is paid for by raising taxes on millionaires.

Read more about the week ahead at The Hill.

House Republican leadership has detailed a busy legislative agenda for the remainder of June in a memo sent from Majority Leader Eric Cantor (R-VA) to House Republicans sent Friday. The House will address issues at the Department of Veterans Affairs, three appropriations bills, three tax extender bills, and legislation to make gas and other energy prices cheaper. Notably absent from the agenda: any mention of immigration, an unemployment extension, or the expiring Export-Import Bank. Read the memo at Roll Call.

The Office of Federal Relations continues to advance our appropriations priorities, as well as monitoring legislative efforts on student loans.

Senate Committees Hold Hearings on Student Loans

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This morning Senators discussed student loans in two simultaneous committee hearings.

The Senate Budget Committee, which is chaired by Washington State’s Senator Patty Murray, held a full committee hearing titled, “Impact of Student Loan Debt on Borrowers and the Economy.” Key witnesses in the hearing included representatives from the Consumer Financial Protection Bureau, the Student Virginia Education Association, and the Contemporary History Institute at Ohio University. A video of the hearing and written testimony can be found here.

Over in the Senate Banking, Housing and Urban Affairs Committee, the Subcommittee on Financial Institutions and Consumer Protection held a hearing titled, “Student Loan Servicing: The Borrower’s Experience.” Scheduled witnesses included representatives from the Student Veterans of America, the American Federation of Teachers, the Heritage Foundation, and the Denison University director of financial aid. A webcast of the hearing along with written testimony can be viewed on the Committee’s website here.

ED Announces Plan College Ratings Timeframe

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Today, the Department of Education (ED) announced a timeframe for rolling out the Administration’s proposed College Ratings system. In a post by Deputy Under Secretary Jamienne Studley entitled, “Making it Easier to Pick and Pay for College through Ratings“, the Administration announced that the college ratings system will be ready this Fall and a final version will be ready before the 2015-16 school year.

You can read the post here.

Larsen Introduces Bill to Protect Bereaved Student Borrowers

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Today, Congressman Rick Larsen (D-WA) introduced the Bereaved Student Borrowers Act. The bill  is designed to protect grieving students and students facing family hardship from auto-defaulting on their private student loans and to get better access to information about cosigner release requirements. The bill also prohibits lenders from reporting an auto-default as a result of cosigner death or bankruptcy to credit reporting companies and stops these companies from including this information on their reports.

This issue was brought to light by the Consumer Financial Protection Bureau, which identified significant issues facing private student loan borrowers in a recent quarterly report. As of 2011, approximately 90 percent of private student loans had cosigners, and many of these loan contracts contain clauses allowing the loan to be accelerated into default upon death or bankruptcy of a cosigner, often a parent or grandparent, even when students are making loan payments on time.

The bill has eight original cosponsors, including Reps. Eleanor Holmes Norton (D-DC), Niki Tsongas (D-MA), Suzan DelBene (D-WA), Pedro Pierluisi, Denny Heck (D-WA), André Carson (D-IN), William Enyart (D-IL), Peter Welch (D-VT), and James Moran (D-VA).

A fact sheet on the bill can be found here.

Ryan Reveals House FY15 Budget

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House Budget Chairman Paul Ryan unveiled the House FY15 Budget today. The measure proposes to cut $5.1 trillion over a decade in a bid to erase the federal deficit, while calling once again for dramatic changes to Medicare, Medicaid, and the tax code.

The House proposal would significantly reduce federal support for college access. The Ryan Budget would  eliminate the interest subsidy for all subsidized undergraduate student loans — based on a CBO estimate last year,that would increase loan costs to students by some $50 billion over ten years. The proposed budget would eliminate all mandatory funding for Pell, shifting it totally to discretionary funding, while freezing the maximum Pell grant for the next decade. That essentially means that $870 in the maximum grant would have to be funded by increased discretionary funds or the maximum be cut from $5,730 to $4,860.

Additionally, the Ryan Budget proposes to cut Non Discretionary Defense (NDD) funding by $761 billion below the current caps, and more than doubles down on the sequester cuts by shifting all of the cuts scheduled for defense starting in FY16 to NDD funding. In FY 16, the NDD cap would be cut from $492 billion to $450 billion, an 8.5% cut.  By the end of the ten year window, NDD would be cut by 22%.

The nearly 100-page blueprint is likely be the last formal budget proposal from Ryan, the Republican chairman of the Budget Committee who wants to move to the more powerful Ways and Means Committee next year.

The House Budget Committee is expected to mark up the legislation Wednesday in a session expected to last well into the night.

The Office of Federal Affairs is continuing to review the legislation and will provide updates as the measure changes in the legislative process.