A House GOP proposal called the “PROSPER Act” would replace current income-driven repayment plans. The existing plans are designed to make payments affordable for millions of Americans with federal student loans. Additionally, the bill proposes the elimination of the Public Service Loan Forgiveness (PSLF) program. Congress created the forgiveness program in 2007 to help vital, but often underpaid, public service workers pay for college, but PSLF is on the chopping block. Here is a piece by The Washington Post covering the Congressional Budget Office’s estimates and the impact this bill will have on the lives of Americans with student debt.
This piece was originally published at The Washington Post.
“The bill forces students to borrow more and then pay more to repay their loans.”
College students would lose $15 billion in federal student aid over the next decade if House Republicans succeed in turning their higher education bill into law, according to a reportreleased Tuesday by the nonpartisan Congressional Budget Office.
The Promoting Real Opportunity, Success and Prosperity through Education Reform Act, sponsored by Reps. Virginia Foxx (R-N.C.) and Brett Guthrie (R-Ky.), aims to overhaul the federal law governing almost every aspect of higher education. The 590-page bill cleared the House Committee on Education and the Workforce in December, without hearings and despite calls from the higher education community for more input and time to analyze the legislation.
Democrats on the committee, who were cut out of drafting the bill, have slammed the legislation for slashing some student aid programs, while funneling more federal dollars to controversial for-profit colleges.
“The CBO’s score confirms what we already knew to be true – this bill makes college more expensive for America’s students and working families,” said Rep. Bobby Scott (D-Va.), ranking member of the House Education Committee. “The bill forces students to borrow more and then pay more to repay their loans.”
The legislation has garnered mixed reviews. Some policy analysts and student advocates have praised it for using grants to provide incentives for students to graduate in four years, for eliminating student loan origination fees and for expanding work-study opportunities for low-income students.
“The reforms within the PROSPER Act are necessary to provide students with a high-quality education, and fix a system that has not been serving their needs,” said Michael Woeste, a House Education Committee spokesman. “Not only have we been able to put forward major reforms that improve the postsecondary education system for students like the expansion of Pell grants . . . but we have shown that those major reforms can be done while still being fiscally responsible.”
But some worry the bill could raise the cost of college for students who can least afford it by no longer paying the interest on low-income students’ loans while they are in school and limiting their repayment options once they graduate…