By Catherine Brown, Senior Director of Policy and Advocacy
Reading time: Four minutes
Another week has passed with neither major higher education decision coming down from the Supreme Court (SCOTUS). In anticipation of a decision on the legality of the student debt forgiveness case, leading Democrats and Republicans in Congress introduced
legislation this week to address the growing student debt and college affordability crisis. Here is a quick summary of the two approaches.
College For All Act
Senator Bernie Sanders (D-VT) and Representative Pramila Jayapal (D-WA) introduced the College For All Act, which would guarantee tuition-free community college for all students and allow students from single households earning up to $125,000 a year, and married households earning up to $250,000 a year, to attend
college without student loan debt. If passed, the College for All Act would also:
Double the maximum Pell Grant award: $7,395 to $14,790 for the 2024-25 school year for students enrolled at public and private nonprofit colleges.
Establish a $10 billion grant program for states participating in the federal-state partnership to scale evidence-based practices and strategies.
Triple Federal TRIO funding from $1.191 billion in FY23 to $3 billion in FY24.
Double GEAR UP funding from $388 million in FY23 to $736 million in FY24.
Double mandatory funding for Historically Black Colleges and Universities, Tribal Colleges and Universities, and other Minority-Serving institutions.
Additional original co-sponsors include: Senators Richard Blumenthal (D-CT), Edward Markey (D-MA), Jeff Merkley (D-OR), Chris Murphy (D-CT), Alex Padilla (D-CA), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD). and Peter Welch (D-VT).
This legislation was first introduced in 2015. It is paid for by the Tax on Wall Street Speculation Act of 2023, which imposes a 0.5% tax on stock trades, a 0.1% fee on bonds, and a 0.005% fee on derivatives and other financial instruments. Senator Sanders
and Rep. Barbara Lee (D-CA) introduced the Tax on Wall Street Speculation Act at the same time as the College Affordability Act.
Lowering Education Costs and Debt Act
Senators Cassidy (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, along with Senators Chuck Grassley (R-IA), John Cornyn (R-TX), and Tommy Tuberville (R-AL) introduced a package of five bills aimed at providing
more transparency in college costs and reducing the ability of students to take out loans. This package was explicitly positioned as a response to President Biden’s plan to forgive student loans. “This comes as President Biden attempts to enact his
$400 billion student debt scheme, which would transfer up to $20,000 in student loan debt per borrower onto taxpayers who didn’t go to college or already paid off their debt,” stated the press release announcing the package.
The bills in this package include:
The College Transparency Act, which reforms the college data reporting system to ensure
that students and families have better information on student success and outcomes as they consider their postsecondary options. This bipartisan bill was introduced by Senators Cassidy and Warren (D-MA). The National College Attainment Network
(NCAN) has endorsed this bill.
The Understanding the True Cost of College Act, which requires colleges to use a standard financial aid award letter,
developed by the US Department of Education, with clear indications of the types and breakdown of aid (scholarships, loans, work study, etc.). This legislation is also bipartisan, introduced by Senators Grassley and Tina Smith (D-MN), and NCAN
has also endorsed this legislation.
The Informed Student Borrowing Act, which offers students clear information about their student debt, including their total
loan debt, duration, expected monthly payment, and likely future earnings based on the program they are attending, completion rates, and more – on an annual basis. This bill was introduced by Senator Steve Daines (R-MT).
The Streamlining Accountability and Value in Education (SAVE) for Students Act, which streamlines federal student loans repayment options from
nine to two (one standard and one income-driven) and prohibits students from borrowing new loans to enroll in programs where they cannot earn more than a high school diploma or graduate degree. This bill would also prohibit new
federal student loans from paying for undergraduate/graduate programs in which half of the former students are unable to earn a salary higher than the median high school graduate/bachelor’s degree recipient. This bill ends the Biden Administration’s
income-driven repayment program, which caps borrowers payments at 5% of discretionary earnings.
The Graduate Opportunity and Affordable Loans (GOAL) Act, which ends the Graduate PLUS loans program and allows institutions to set
lower loan limits by program. Stafford loan limits for graduate students would remain in effect. This bill was introduced by Tommy Tuberville (R-AL).
To sum up, lots to like in these bills. The Sanders approach includes greater investment in higher education and a promise to provide a debt-free path to community college, while Cassidy and his colleagues are focused on limiting the amount of loans students
take out in the first place through sobering information and a cap on the ability to borrow.
In related news, the Biden Administration announced that student loan payments will resume in October, with notices sent to borrowers in September to help them prepare for the return to repayment. When coupled with Better FAFSA implementation, it’s clear
that we are in for a busy fall when it comes to federal student aid.
Email to a Friend