Midterm Elections 2014: Student Loans, For-Profit Colleges And The Higher-Ed Syllabus For A New Congress

Career College Central Summary:

  • Sen. Lamar Alexander (R-Tennessee) cruised to victory Tuesday night, which means in a Republican-controlled U.S. Senate he’s likely to occupy a key role for some 40 million student loan borrowers, and just about anyone else who’s attending — or thinking about — college: chair of the Senate’s Health, Education, Labor, and Pensions (HELP) Committee.
  • “It’s an important job in terms of setting the landscape for education policy in the Senate,” explains Ben Miller, a senior policy analyst at the New America Foundation.
  • Alexander is a former college president and Secretary of Education (under President George H.W. Bush) who has a reputation for reaching across the aisle. Now that the GOP will lead both houses of Congress, here’s how the party could revise the higher-education syllabus.
  • 1. Cutting red tape: One of Alexander’s top priorities is to simplify rules and regulations for families and school administrators. For example, Alexander would like to boil down the federal financial aid form, from 100-plus questions to just two — part of a bill he co-sponsored with Colorado Democrat Sen. Michael Bennet. “My principal goal in higher education is to deregulate it,” Alexander recently told the Chronicle of Higher Education.
  • 2. For-profit colleges: Whereas retiring Sen. Tom Harkin (D-Iowa), current chair of the HELP committee, has repeatedly criticized for-profit colleges for producing poor student outcomes and relying heavily on taxpayer dollars, expect a marked shift in tone toward the industry. In fact, Republicans could aim to defang, or defund, the Obama Administration’s new “gainful employment” rule, which ties for-profits’ access to federal student aid funds to graduates’ job outcomes.
  • 3. Student loans: Sen. Elizabeth Warren’s proposal to allow borrowers to refinance their student loans at lower interest rates has twice failed to win enough votes in the Senate. And the measure (which Alexander referred to in June as a “political stunt”) is unlikely to be a focus for a Republican-controlled Congress. That’s because refinancing — and for that matter, loan forgiveness, which is incorporated into some federal income-based repayment options — can ultimately fall on taxpayers to absorb, says Andrew Kelly, director of the Center on Higher Education Reform at the conservative American Enterprise Institute. “So they wind up being a cost in the budget.” 
  • Republicans, Kelly adds, “have been, and will continue to be much less keen on loan relief that costs the government a bunch of money.” When it comes to loan forgiveness, adds Ben Miller, “I could see some attempts by Republicans to change the terms of income-based repayment.”
  • Advocates at Generation Progress, an arm of the left-leaning Center for American Progress, say they’re still hoping to see proposals that address student debt: “Definitely that is something we’re watching and concerned about,” says policy director Sarah Audelo, adding: “At the end of the day, we do have 40 million borrowers across the country, and people are struggling.”
  • 4. Pell Grants: Rep. Paul Ryan’s proposed budget contains $90 billion worth of cuts to the Pell program, which provides federal grants to low-income students. “We see what’s in the Ryan budget as a signal of what the priorities are for the Republicans in higher education,” Audelo says. That’s worrisome, she says, because “any kinds of cuts to Pell would drastically impact the ability of young people to attend, and complete college.” 
  • 5. Higher Education Act reauthorization: The Higher Education Act largely governs the federal government’s role in higher-ed, including how the federal student aid program works. It’s a hulking law, and the reauthorization process (which got underway this year) could easily stretch through 2016. The cost of attending and completing college “is a huge issue, and it’s going to be a main driver of the debate in the education committees in the next Congress,” says attorney Kenneth Salomon, with the law firm Thompson Coburn in Washington, D.C.   

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