Alexander offers student loan relief and FAFSA simplification
Towards the end of his term in Congress, Senator Lamar Alexander, chairman of the Senate Committee on Education, offered to excuse those without income from making student loan repayments, as well as adopt one of its long-standing goals: to simplify the forms used to apply for federal student aid.
Alexander, a Republican from Tennessee who is retiring at the end of the year, noted in a Senate speech Tuesday that the CARES law stay on student loan borrowers from making payments during the coronavirus pandemic will expire on September 30.
As part of his proposal, Alexander said people with no income, excluding unemployment, will not have to make federal student loan repayments. Those who continue to earn money should pay no more than 10 percent of their remaining income after paying for essentials like rent and food.
In either scenario, the loans will be canceled after 20 years for undergraduate loans or 25 years for graduate student loans.
Alexander proposed replacing the various loan repayment options with another approach – making monthly payments on principal and interest over 10 years, which he said would lead to paying less interest.
“The current confusing system of nine different ways to pay off your student loans could be thrown in the trash,” he said.
Citing an estimate from the Congressional Budget Office, he also said that streamlining the loan repayment process could save the government $ 10 billion over the next decade as students would be more likely to repay their loans.
Debate on the stimulus bill
Alexander made the proposal, which will be considered separately from a possible additional coronavirus relief plan, on a day dedicated to negotiations on the aid bill.
Although negotiations on the next package, which are expected to cost at least $ 1 trillion, are in their early stages, Senate Republicans plan to give colleges and universities an additional $ 30 billion in aid, the government said. chairman of the senatorial committee on education credits.
Sen. Roy Blunt told reporters Republicans plan to offer $ 70 billion in aid to K-12 schools, half of which is dedicated to schools that are reopening, and an additional $ 5 billion to governors for their education. discretion.
In a key point for colleges, Blunt said higher education funds would not be tied to their reopening.
“Managing half for primary and secondary is frankly enough. My take is that the money just needs to go straight to colleges and universities like it did last time around, ”the Republican senator from Missouri said, referring to how college aid in the CARES law has been distributed. He declined to say whether the Trump administration would agree.
The $ 30 billion in aid, however, would be less than the $ 46.6 billion that associations representing colleges and universities sought to mitigate the financial blow institutions suffered during the pandemic. And even that figure was conservative, according to higher education lobbyists. The American Council on Education, a group of presidents representing colleges and universities, had estimated that the price to pay for institutions to safely reopen their campuses would be $ 74 billion.
Still, Senate Republicans were negotiating with the Trump administration on a number of sticking points, including how much to spend to increase testing for the virus. Senate Majority Leader Mitch McConnell, a Republican from Kentucky, told reporters that a formal proposal will be released in the coming days. But he acknowledged that any package would need a few Democratic votes to pass the Senate.
“There is always room for negotiations, because the Democrats are not out of place,” he said.
And Democrats should try to increase the education money in the package. Senator Patty Murray, the top Democrat on the education committee, and Senator Chuck Schumer, the Democratic Leader of the Senate, have proposed giving colleges $ 132 billion in additional aid to cover both the cost reopening and the financial difficulties many institutions are facing.
The Democratic majority in the House, meanwhile, proposed giving states $ 27 billion to spend on higher education, along with an additional $ 10 billion that would go directly to public and nonprofit institutions.
“The situation is very fluid as Senator McConnell tries to reach consensus between the White House and Senate Republicans and there are a number of major sticking points in the discussion,” said Terry Hartle, vice president. principal of ACE for government and public affairs.
Meanwhile, Alexander offered to continue to streamline the free application for Federal Student Aid, from 108 questions to between 20 and 33 questions. As a first step, last year Congress authorized the Internal Revenue Service to use answers to 22 questions candidates had previously asked on their tax returns.
“Simplifying the FAFSA in this way would remove the barriers that would make it easier for more low-income Americans to attend college and increase the number of Pell Grants each year,” he said.
It was not immediately clear how Senate Democrats and advocates proposing alternative student debt cancellation plans would receive Alexander’s proposals. In one New York Times Opinion article on Tuesday, Senator Elizabeth Warren reiterated a proposal by Senate Democrats to excuse monthly payments for the remainder of the pandemic, with guarantees to eliminate at least $ 10,000 in debt from each student borrower.
“We should write off student loan debt globally so that families do not have a student debt bomb waiting for them on the other side of this pandemic – a burden that again falls disproportionately on students of color.” , wrote the Democratic senator from Massachusetts.