Democrats anticipate the reforms will cost $400 billion over ten years.
The bill sends a clear message that greater federal investment is key to easing the burden of student debt, boosting graduation rates and lifting barriers to economic mobility. Democrats would use the federal purse to provide more grant aid and support services to students while imposing tougher regulations on colleges that produce poor outcomes.
Spending more money runs counter to Republican priorities to limit taxpayers’ stake in financing of higher education and the federal role in the sector. The ideological differences have made a bipartisan overhaul of the Higher Education Act elusive. The federal law, originally passed in 1965, is supposed to be renewed every five years but was last reauthorized a decade ago.
House Democrats’ latest effort to reauthorize the law, through legislation dubbed the College Affordability Act, could move quickly through the chamber, albeit with revisions. Democrats have made higher education restructuring a priority.
Aspects of the legislation could garner bipartisan support. A number of provisions mirror elements of a bill introduced last month by Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.), including proposals to overhaul the financial aid application and extend Pell Grants to prisoners. Other provisions of the House bill, including restoring Obama-era regulations aimed at for-profit colleges and giving the federal government more power over accreditation, will probably rankle Republicans.
Rep. Robert C. “Bobby” Scott (D-Va.), chairman of the House Education Committee, which drafted the legislation, said lawmakers across the political spectrum should be able to support a package that is a “necessary and sensible response to the challenges that students and families are facing every day.”
He said the proposal “improves the quality of education by holding schools accountable for their students’ success, and it meets students’ needs by expanding access to more flexible college options and stronger support — helping students graduate on time and move into the workforce.”
The bill calls for expanding federal aid to low-income families by increasing Pell Grants and tying them to inflation so the value doesn’t diminish. It would also create a grant program to help needy students address emergencies such as loss of housing or not having enough to eat.
Democrats are proposing creation of a partnership between the federal government and states to help them waive tuition at community colleges for residents. In exchange for federal funding, states would have to commit to sustained investment in public colleges and universities. The legislation creates a $500 million fund for states to identify gaps in academic achievement and per-student spending and prioritize aid for colleges that serve minorities, low-income students and those in need of academic help.
States that agree to cover tuition and fees before any other grants or scholarships are applied — what’s known as a first-dollar program — would receive federal grants to assist with the cost. This model would allow students who receive need-based financial aid, such as Pell Grants, to stretch those dollars further and reduce the need to borrow.
Students who borrow would no longer pay loan origination fees and would have simpler options for repaying the debt. House Democrats want to whittle the suite of eight student loan repayment plans down to two: one standard 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 forgiven after 20 to 25 years. The House bill would require borrowers to pay nothing until their income exceeds 250 percent of the federal poverty line, about $31,225 for an individual in 2019.
While the 1,200-page legislative package is being lauded for its comprehensive approach, it is receiving mixed reviews from higher education experts. Some worry Democrats are missing an opportunity to push liberal goals such as lowering interest rates on student loans or capping interest that can accrue.
“There is more work to be done in terms of ensuring affordability at both the front and the back end,” said Ashley Harrington, senior policy counsel at the Center for Responsible Lending, an advocacy group.
Other experts say the legislation would increase micromanagement of colleges, with requirements such as having civil rights compliance personnel on staff. “The bill is going to increase the cost of doing business for most institutions,” said Terry W. Hartle, senior vice president for the American Council on Education, a higher education group.
Hartle said the proposed legislation has merit but needs to be fleshed out.