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The Trump administration has rolled out its proposal for higher education reform, urging Congress to make or change laws impacting accreditation, Pell Grants, and student loan repayment. The plan reflects the president’s FY20 federal budget proposal, which included a $7 billion cut to the Department of Education (ED), changes to student loan repayment processes, and elimination of the Public Service Loan Forgiveness Plan.

The proposal, which is the White House’s directive to Congress to enact reforms as part of the reauthorization of the Higher Education Act (HEA), includes plans for Congress to:

  • Consolidate the five income-driven student loan repayment options into a single program that caps monthly payment at 12.5 percent of a borrower’s discretionary income.
  • Expand Pell Grant eligibility to include short-term programs that provide students with a credential, certificate, or license in a high-demand field.
  • Extend loan forgiveness to all undergraduate students (after 180 months of repayment through an income-driven repayment plan), citing “biases and administrative complications of the Public Service Loan Forgiveness Plan.”
  • Make changes to the Federal Work Study program to create career-oriented opportunities for students, rather than “just subsidized employment” on campus.
  • Provide federal financial aid to prisoners eligible for release to improve employment outcomes and reduce recidivism.
  • Require institutions to share in the financial responsibility associated with student loans.
  • Define accreditors by mission rather than by geography.
  • Make permanent the White House’s advisory and working groups in support of Historically Black Colleges and Universities.

Following a breakdown in HEA negotiations last year, Sens. Lamar Alexander (R-TN), chair of the Senate’s education committee, and Patty Murray (D-WA), the ranking member, have resumed discussions about moving forward on legislation. Alexander, who is retiring, hopes to enact a bipartisan bill by the end of this year.

Contact

Mary Bachinger

Director, Tax Policy

202.861.2581


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