The Capitol Recap

Capitol RecapWith reauthorization of the Higher Education Act due for action, members of Congress unveil new proposals for the future of higher education on a continuous basis. NASFAA's series, The Capitol Recap, provides a monthly update on new pieces of legislation introduced in both the House of Representatives and the Senate to provide aid administrators with the most up-to-date information for their offices and their own administration. Bills listed here, unless otherwise noted, have been referred to committee and are awaiting action or consideration.

For a complete list of legislation introduced in this session of Congress, visit the NASFAA Legislative Tracker.

July and August 2017

Consumer Information & Transparency

  • HR 3199, Improving Access to Higher Education Act: This bill would require institutions to disclose in the Integrated Postsecondary Education Data System (IPEDS) data regarding students with disabilities, including total number of students with disabilities enrolled, number of students accessing or receiving accommodations, percentage of students with disabilities of all undergraduate students, and the total number of undergraduate certificates or degrees awarded to students with disabilities. The bill also includes provisions intended to improve higher education for students with disabilities through competitive grant programs. Rep. DeSaulnier (D-CA) introduced this piece of legislation with 13 Democratic co-sponsors.
  • S. 1628, Know Before You Owe Federal Student Loan Act: This piece of legislation, introduced by Sen. Grassley (R-IA), would require annual counseling for every newly disbursed loan. In this "pre-loan counseling," institutions would be required to estimate a borrower's debt-to-income ratio and share statements informing the borrower that she does not have to accept the full amount of loans for which she is eligible, among other requirements. Borrowers would be required to manually enter the exact dollar amount they intend to borrow, either in writing or through electronic means, after completing pre-loan counseling, but before certification and disbursement. In addition, students would receive regular statements about their loan balance from their servicer while in a period of deferment or forbearance, including while in school. 

FAFSA Simplification

  • HR 3516, Reduce Barriers to College Act: This bill, covered by NASFAA in Today's News, aims to make the process of obtaining a verification of non-filing (VONF) letter easier by allowing students and parents to upload documents such as household utility bills, student transcripts, and bank account statements as a way to authenticate and complete the online VONF request process. The IRS would also be required to respond to all VONF requests within 10 business days. Rep. Veasey (D-TX) introduced this bill.

Immigration

  • HR 3591, American Hope Act: This comprehensive immigration bill, led by Rep. Gutierrez (D-IL) with 126 Democratic co-sponsors, would allow DACA beneficiaries and other immigrant youth to apply for "conditional permanent resident" (CPR) status. An individual with CPR status would then be eligible for federal student aid. If a CPR-status individual remains in compliance with the law for three years, the individual would be eligible to become a "lawful permanent resident" (LPR). The bill also creates a five-year path to citizenship, where time spent in CPR or LPR status would count toward the five-year requirement. The bill also repeals section 505 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), which prohibits institutions from offering in-state tuition to undocumented students without also offering in-state tuition to students from other states. 

Loans & Repayment

  • S. 1521/HR 3390, Student Loan Relief Act: This bill makes a number of federal lending changes. The bill would eliminate origination fees, create a new loan refinancing program for loans made under the Direct Loan Program and the FFEL Program, and lower interest rates. For new loans issued after July 1, 2018, the interest rate for undergraduates would be equal to the lesser of the 10-year Treasury note plus the Federal Reserve discount rate or 4%. For Federal Direct Unsubsidized Stafford Loans for graduate and professional students, the interest rate would be equal to the lesser of the 10-year Treasury note plus the Federal Reserve discount rate or 5%. For PLUS loans, the interest rate would be equal to the lesser of the 10-year Treasury note plus the Federal Reserve Discount rate or 6%. The bill creates a refinancing program that allows both FFEL and DL borrowers to refinance at current interest rates. For consolidated loans, the interest rate would be equal to a weighted average of the current interest rate for each proportion of the consolidated loan. Sen. Nelson (D-FL) and Rep. Castor (D-FL) introduced this bill in the Senate and the House, respectively. 
  • HR 3346, Student Opportunity ActSponsored by Rep. Lawson (D-FL), this bill makes a number of federal lending changes. The bill would eliminate origination fees, create a new loan refinancing program for loans made under the Direct Loan Program and the FFEL Program, and lower interest rates. The refinanced loan would have an administrative fee of not more than .5% and a fixed interest rate of the most recent 10-year Treasury note plus .5%. For loans issued after July 1, 2018, the interest rate for undergraduates would be equal to the 10-year Treasury note plus .5% or 8.25%. For Federal Direct Unsubsidized Stafford Loans for graduate and professional students, the interest rate would be equal to the June 10-year Treasury note plus .5% or 9.5%. For PLUS loans, the interest rate would be equal to the June 10-year Treasury note plus .5% or 10.5%. In addition, the bill includes a provision to exempt loan forgiveness and discharge from gross income for income tax purposes. 
  • HR 3554/S. 1712, SIMPLE Act: This bill, the Streamlining Income-driven, Manageable Payments on Loans for Education Act, would auto-enroll delinquent borrowers in an income-driven repayment (IDR) plan and automatically recertify income and family size on an annual basis for borrowers already enrolled in IDR plans. Supported by NASFAA and covered in Today's News, the bill was introduced by Rep. Bonamici (D-OR) in the House and by Sen. Wyden (D-OR) in the Senate.
  • HR 3560, GPA Act: This bill, the Grace Period Alleviation Act, would allow borrowers of Direct Subsidized Loans and Direct Unsubsidized Loans the option to extend the grace period for an additional six months for a total of twelve months. A borrower would be informed of this option by the Department of Education at least 45 days prior to the start of the borrower's repayment period. Subsidized loans would not accrue interest during the grace period extension, but unsubsidized loans would continue to accrue interest during this period. In addition, the bill eliminates the temporary provision that led Direct Subsidized Loans disbursed between July 1, 2012, and July 1, 2014, to accrue interest during the grace period. Rep. Aguilar (D-CA) sponsored the bill.
  • HR 3572, Making College More Affordable Act: This piece of legislation, sponsored by Rep. Cicilline (D-RI), would eliminate undergraduate eligibility for Federal Direct Stafford Loans and instead create the "Federal Interest Free Education Loan," where borrowers would repay their loan through mandated automatic deductions from pre-tax income. The loan would have an aggregate limit of $90,000 over four years only. A borrower may consolidate any Federal Direct Loan into the new loan program. Borrowers would repay this loan based on a percentage of their income over the course of 30 years, starting at 4% for those borrowers earning less than $100,000 and increasing progressively with a cap at 10% for borrowers making over $150,000. No payment would be due if a borrower's income is below roughly 337% of the federal poverty line (currently about $40,000 for an individual). In addition, no interest accrues on the loan unless "a borrower is not earning taxable income due to professional negligence, professional incompetence, or malicious action on the part of the borrower." All remaining loan balance would be canceled after 300 monthly payments (25 years), and the balance canceled would be subject to income tax. 
  • HR 3630, Student Loan Borrowers' Bill of Rights Act: The bill provides bankruptcy protections for federal and private student loans, reestablishes a statute of limitations on student loan debt collection, and prohibits the garnishment of wages, tax refunds, and Social Security benefits. The bill expands PSLF by allowing borrowers in public service jobs the ability to have half of their loan balance forgiven in five years. The bill allows Parent PLUS loans to be repaid through income-based repayment and forgiven through Public Service Loan Forgiveness (PSLF). In addition, the bill prohibits loan default from preventing a student from accessing transcripts or other certifications or from being used against a borrower in a Federal or State proceeding involving the individual's professional or vocation license. The bill also excludes student loan discharge or forgiveness from the calculation of gross income for income tax purposes. Rep. Wilson (D-FL) introduced the bill. 
  • S. 1675, Student Loan Servicer Performance Accountability Act: This bill cancels the Department of Education's 2016 loan servicing solicitations and amendments. The bill prohibits the Department from issuing any future servicing solicitations unless the proposal provides for the participation of multiple servicers that contract directly with the Department and allocates borrower accounts to servicers based on performance. A bipartisan group of four Senators led by Sen. Blunt (R-MO) introduced this bill the day before the Department announced its intention to revisit its move to a single servicer

Military & Veterans Aid

  • HR 3218/S. 1598, Harry W. Colmery Veterans Educational Assistance Act: This measure makes a number of changes to enhance veterans educational benefits, the most significant of which is to provide lifetime access to benefits, instead of the current expiration of benefits after 15 years for individuals who first become entitled to them on or after Jan. 1, 2013. Rep. Roe (R-TN) and Sen. Isakson (R-GA) sponsored the bill which passed the House and Senate overwhelmingly before being signed into law by President Trump on August 16. For more information on the bill, see NASFAA's analysis of the legislation

Student Aid Funding

  • H.Con.Res. 71, FY 2018 Budget Resolution: The fiscal year (FY) 2018 budget resolution, covered in Today's News, provides a high-level overview of budget and funding priorities for FY 2018, which affects award year 2018-19. The resolution, led by Rep. Black (R-TN), cleared the House Budget Committee on July 21. 
  • HR 3358, FY 2018 Appropriations for the Departments of Labor, Health and Human Services, and Education, and related agencies: The fiscal year (FY) 2018 Labor-HHS-Education Appropriations Bill, the bill that sets the funding levels for several large domestic government agencies, provides all funding for federal student aid programs for award year 2018-19. The bill, covered in Today's News, would rescind $3.3 billion from the Pell Grant Program reserve. The bill calls for level funding for FSEOG and also for the Federal Work-Study (FWS) Program. It also includes increases to programs such as TRIO and Gear Up – at $60 million and $10 million, respectively. Rep. Cole (R-OK) sponsored this bill, which passed out of committee on July 21.

Tax Issues

  • HR 3346, Student Opportunity Act: This bill, sponsored by Rep. Lawson (D-FL), includes a provision to exempt loan forgiveness and discharge from gross income for income tax purposes. The bill also makes a number of other federal lending changes, including eliminating origination fees, creating a new loan refinancing program, and adjusting interest rates for new loans.
  • HR 3573, Student Loan Interest Tax Deduction Expansion ActSponsored by Rep. Cicilline (D-RI), this bill would increase the dollar limitation for the student loan interest deduction from $2,500 to $7,500 and to $15,000 for joint filers. Taxpayers with a "modified" adjusted gross income over $100,000 (or over $200,000 for joint filers) would be ineligible for the deduction. "Modified adjusted gross income" means adjusted gross income including deductions for student loan interest; qualified tuition and related expenses; domestic manufacturing; income from Guam, American Samoa, the Northern Mariana Islands, or Puerto Rico. 
  • HR 3581, Pell Grant Flexibility Act: This bill, introduced by Rep. DeSaulnier (D-CA), would exclude Pell Grant awards from the calculation of gross income.
  • HR 3630, Student Loan Borrowers' Bill of Rights Act: The bill excludes student loan discharge or forgiveness from the calculation of gross income for income tax purposes. The bill provides bankruptcy protections for federal and private student loans, reestablishes a statute of limitations on student loan debt collection, and prohibits the garnishment of wages, tax refunds, and Social Security benefits. The bill expands PSLF by allowing borrowers in public service jobs the ability to have half of their loan balance forgiven in five years. The bill allows Parent PLUS loans to be repaid through income-based repayment and forgiven through Public Service Loan Forgiveness (PSLF). In addition, the bill prohibits loan default from preventing a student from accessing transcripts or other certifications or from being used against a borrower in a Federal or State proceeding involving the individual's professional or vocation license. Rep. Wilson (D-FL) introduced the bill. 

 

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Publication Date: 8/25/2017


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