By Carrie Warick, Director of Policy and Advocacy, and Ray AlQaisi, Policy and Advocacy Manager
Yesterday, Sen. Lamar Alexander (R-TN), the chair of the Senate Health, Labor, Education, and Pensions (HELP) Committee, introduced a bill combining several bipartisan ideas as a step toward reauthorization of the Higher Education Act. In the process, he also, for the second time, blocked legislation that would extend funding for Minority Serving Institutions (MSIs) for two years. Sen. Alexander prefers the approach he presents in the Student Aid Improvement Act, which would permanently extend the funding for MSIs.
Without a legislative fix, the federal funding stream for MSIs will expire on Sept. 30.
The Student Aid Improvement Act brings together several bipartisan ideas along with the MSI funding. Among these ideas is FAFSA simplification, one of NCAN’s core policy priorities. Watch the NCAN blog next week for more details about how Sen. Alexander’s new FAFSA proposal would work – it’s markedly different from the two-question approach he proposed in the past.
In summary, the Student Aid Improvement Act includes the following proposals:
FAFSA Simplification: Shorten the form to under 30 questions, with fewer questions for students from low-income backgrounds. Improve IRS data sharing so that all students are eligible to have their information transferred.
Financial Aid Offers: Standardize the terms and financial aid offer form used by all postsecondary institutions.
Pell Grant Determination: Move to Pell award determination tied to poverty level and a look-up table, which will allow for an early awareness program through means-tested benefit eligibility.
Pell Grant Maximum: Increase the maximum award by $20.
Pell Grant Access:
Incarcerated individuals eligible for parole would be able to access Pell.
Individuals pursuing high-demand jobs with short-term training programs (150-599 credit hours) would be eligible for Pell Grants.
Income-Based Repayment Change: Remove the cap on income-based repayment plans so that all participating borrowers pay 10% of their income.
This package is cost-neutral. The expenses are paid for by the above-mentioned change to income-based repayment that would eliminate the current maximum monthly payment. Borrowers would instead be required to pay the full 10% of their discretionary income. The current maximum payment cap affects high-income individuals who have large amounts of debt. Eliminating this cap, a move that was supported by the Obama administration and is now endorsed by the Trump administration, would create additional revenue in the loan program to pay for the funding to MSIs and the Pell Grant increase and access expansion.
This legislative proposal is facing stiff partisan discord. While each of the individual ideas has bipartisan support, Sen. Patty Murray (D-WA) who is the ranking member of the HELP Committee, would prefer to do a comprehensive reauthorization of the Higher Education and does not want to consider “piecemeal” bills such as this one.
The Student Aid Improvement Act largely ignores several areas of higher education, including: the federal student loan portfolio, including streamlining the many repayment options; accountability/quality issues for institutions; accreditation and related institutional eligibility metrics to receive federal student aid; and issues surrounding campus sexual assault – a top priority for Sen. Murray.