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Legislative bills

Senate Bill Proposes Sweeping Changes to College Financial Aid, Including Reduced Student Loan Repayment Options

Strategic Insights

— 1 min read

A proposed change to the tax and spending bill in the Senate aims to overhaul college financial aid, drawing criticism from both opponents and supporters. The 71-page bill would establish new caps on student loan borrowing and drastically reduce repayment options, with some provisions potentially affecting millions of students. The bill's authors claim to have made compromises, but critics argue that it would make college less affordable for low-income students.

Key Takeaways:

  • The Senate bill proposes cutting student loan repayment plans to just two, eliminating the Saving on a Valuable Education (SAVE) program, which has been stalled in court.
  • The bill would also limit lending for graduate students and parents, with lower caps than the House proposal, which aimed to cut subsidized loans altogether for undergraduates.
  • The Senate bill expands Pell Grants, but critics argue that it could waste money by extending eligibility to unaccredited programs.
  • The bill proposes two different accountability rules for colleges, with the Senate version suggesting that federal financial aid be withheld from colleges if they cannot prove graduates are earning more than they would have without a degree.
  • The proposal has drawn both praise and criticism from education experts, with some seeing it as a compromise on college access and affordability.
  • The Center for American Progress estimated that 2 in 3 Pell recipients could have lost their grants or received smaller ones under the House bill.
  • The Senate bill also includes a provision to more fully exclude higher-income students from Pell funds.

Statistics:

  • 8 million people are currently in forbearance due to the SAVE program being stalled in court.
  • 2 in 3 Pell recipients could have lost their grants or received smaller ones under the House bill, according to the Center for American Progress.
  • 71 pages is the length of the Senate bill's higher education section.

Sources:

  • Third Way online statement, cited by Zachary Schermele, USA TODAY ("These loan limits are much more reasonable")
  • National Association of Student Financial Aid Administrators online statement, cited by Zachary Schermele, USA TODAY ("relieved")
  • Institute for College Access & Success online statement, cited by Zachary Schermele, USA TODAY ("waste money")
  • Center for American Progress online estimate, cited by Zachary Schermele, USA TODAY (2 in 3 Pell recipients could lose their grants or receive smaller ones)

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