Home Advocacy House Committee Passes Bill Proposing New Federal Student Loans Limits

House Committee Passes Bill Proposing New Federal Student Loans Limits

by Neil Snyder
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hand cut letters spelling student loan

The Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act proposes changes in support for higher education access, including capping borrowing for student loans and sun setting loan forgiveness.

Late on Dec. 12, 2017, the House Education and the Workforce Committee passed the act (HR 4508) by a 23–17 vote. If passed by Congress, it reauthorizes and amends the Higher Education Act (HEA). Institutional aid, student aid, grants, loans, work-study and accreditation are all conducted in accordance with the HEA.

Committee Chair Virginia Foxx (R-NC) stated her primary goal was to streamline the student aid system by reducing the number of federal loans and grants to one loan and one grant. However, undergraduate and graduate students, their parents, academic faculty and university administrators should be concerned about certain programs that might get eliminated or significantly reduced.

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Foxx indicated she expects the House to take up the bill sometime “next year,” probably in late January or early February. All 23 Republicans voted for the bill, all 17 Democrats voted against it.

HEA programs slated for reduction or elimination by the PROSPER Act include:

Of particular concern to graduate students is a new annual borrowing cap of $28,500. If graduate students need additional funding to finance their studies, they would have to turn to private lenders for the balance. For undergraduate students, the aggregate lending limit would increase from $138,500 to $150,000.

The PROSPER Act also winds down the Public Service Loan Forgiveness (PSLF) program beginning in 2019. Any eligible student with Federal Direct Loans prior to 2019 would be grandfathered into the PSLF program.

The bill would also allow non-university certificate programs to access federal funding through accreditation. It would also require accrediting agencies to be incorporated separately from their sponsoring agencies, such as ASHA’s Council on Academic Accreditation. This requirement may be especially difficult for specialized or programmatic accreditors, which may be forced to increase their accreditation fees to cover their new legal and administrative costs.

ASHA is closely following this legislation as it moves through the House of Representatives.

Over in the Senate, the Health, Education, Labor, and Pensions (HELP) Committee is expected to start its version of the HEA reauthorization process sometime in early 2018. However, HELP Committee Chair Lamar Alexander (R-TN) must negotiate with his Democrat counterpart, ranking member Patty Murray (D-WA), on the Senate bill, because of different legislative rules and a slimmer majority.

Although the PROSPER Act moved quickly through committee, the full House must consider—and possibly change—it. The House will push to finalize its reauthorization bill before mid-term elections next fall. If it fails to pass the PROSPER act—or any version of the HEA reauthorization bill—in 2018, the process will start all over in 2019.

For additional information on the PROSPER Act, contact Neil Snyder, ASHA’s director of federal advocacy, at 800-298-5700 ext. 5614 or nsnyder@asha.org.

 

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