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Young Invincibles’ Take on the Aim Higher Act

Recently, House Democrats released their reauthorization proposal for the Higher Education Act (HEA), entitled the Aim Higher Act, that touches on several different aspects of our existing higher education system. Below is a quick explainer about some policy proposals the bill makes and what other changes can be made to the Higher Education Act that would benefit young people.

Pell Grants:

Major Takeaway: Expands Pell eligibility to new populations and increases the maximum award by $500 while indexing it to inflation.

WINS FOR STUDENTS: This bill makes a myriad of improvements to Pell, our nation’s most important need-based higher education access program. It increases the maximum award by $500 and indexes future growth to inflation, and would make a majority of the award funded through mandatory spending. It would also expand the program to DACA-eligible DREAMers, those with drug convictions, and those incarcerated, as well as allowing partial Pell Grants to be used to allow people to obtain quality short-term credentials and increase the number of semesters a student would be eligible to receive a grant.

WHAT SHOULD COME NEXT?: These are helpful and important policy choices that could be further enhanced by moving all the funding of America’s most important low-income student aid program to the mandatory side of the budget where it will be better protected from potential cuts. The bill could also provide a pathway to higher education for more people, through allowing all DREAMers to be eligible for Pell and other financial aid. Finally, larger increases to the maximum award will do more to combat the declining purchasing power of Pell.

Federal-state partnership to fund tuition-free community college:

Major Takeaway: The bill creates federal funding to incentivize states to provide free community college tuition, a useful framework that can be expanded to include public four-year schools.  

WINS FOR STUDENTS: The bill would create federal-state partnerships to prompt state reinvestment in community college systems, allowing any resident of a participating state to attend community college in that state tuition-free. This would be a sizable expansion of higher education access for millions of people.

WHAT SHOULD COME NEXT?: This important expansion of affordable higher education should be built upon in a final Higher Education Act reauthorization by expanding the federal-state partnership to include debt-free college for in-state, 4-year, public school college students as well. The severity of the student debt crisis and college affordability demands this additional step to truly reverse decades of state disinvestment in higher education and ease the financial burden on students and families.

Simplified repayment:

Major Takeaway: The bill simplifies the student loan repayment system down to one time-based plan and one borrower-friendly, income-based plan, and preserves loan forgiveness.

WINS FOR STUDENTS: Rather than making the devastating decision to end all loan forgiveness like the PROSPER Act, this bill would offer all borrowers one income-based plan with borrower-friendly terms. The plan would allow forgiveness after 20 years of payment equal to 10% of a borrower’s discretionary income, equal to 250% of the poverty line. It would also enable borrowers to consent to remain in enrolled in repayment plans for multiple years, eliminate origination fees, and allow for delinquent borrowers to be placed in income-based plans automatically to limit default. These reforms, combined with the protection and expansion of Public Service Loan Forgiveness, comprise essential lifelines for millions of borrowers looking for a viable pathway to manage their student debt.

WHAT SHOULD COME NEXT?: These excellent reforms could be augmented further by subsidizing interest costs on loans for low-income, high-debt borrowers just starting their careers. Additionally, a public option for borrowers to refinance their loans at lower rates would lessen the debt burden for millions of borrowers without having to sacrifice important consumer protections.

Public Service Loan Forgiveness:

Major Takeaway: The bill preserves PSLF and closes existing gaps in eligibility.

WINS FOR STUDENTS: Whereas the PROSPER Act would do away with the program in its entirety, the Aim Higher Act preserves the Public Service Loan Forgiveness Program, acknowledging the important role that loan forgiveness plays for many students hoping to pursue public service careers, particularly those from low-income backgrounds. The Aim Higher Act would guarantee a loan forgiveness pathway for borrowers in qualifying public service jobs who have made 10 years of eligible payments towards their loan balances. Importantly, it includes veteran-serving organizations amongst the employers eligible for forgiveness, a classification gap that has left veteran-serving borrowers out of PSLF for too long.

WHAT SHOULD COME NEXT?: These changes are important for the thousands of young public servants who are counting on PSLF as they plan their careers and financial futures. Given the confusion among student borrowers and program administrators about the requirements of the program and the process of enrolling and obtaining forgiveness, the next step should be to clarify and simplify those processes. Last year’s omnibus contained a small allocation for borrower outreach – that allocation should be sustained and be used for initiatives that educate borrowers about the requirements of applying for the program, the additions that have been made to the pool of eligible employers and loan types, and to enable consistent and reliable support from the Department for individuals with questions. Additionally, Congress should provide the Department of Education clear administrative and reporting guidance to ensure equitable and transparent application of the program.

FAFSA simplification:

Major Takeaway: The bill would make it much easier for low-income students to submit the FAFSA and access federal financial aid.

WINS FOR STUDENTS: The bill would create an easier pathway for students who have received means-tested federal benefits to obtain a max Pell Grant automatically, and allow all Pell recipients to only have to file their FAFSA one time. These changes would be tremendously helpful in allowing more low-income students to obtain aid, and avoid a burdensome FAFSA verification process, which is disproportionately required of Pell students and can result in the denial of aid through no fault of the student.

WHAT SHOULD COME NEXT?: The improvements to the FAFSA in the Aim Higher Act are significant and truly responsive to the needs of today’s students, particularly those most in need of federal financial aid to get to and through higher education. The bill could go further by codifying the October 1st opening date for the FAFSA application, a timeline that working hand-in-hand with other changes – like usage of prior-prior year tax information, increased language availability, and auto-population through the IRS Data Retrieval Tool, all improvements included in Aim Higher – has contributed to the increase of overall application completions since its implementation in the fall of 2016. The bill could also codify innovation in FAFSA accessibility, ensuring that the FAFSA is available on platforms that young people use to communicate and share information, including mobile compatibility.

Stronger accountability:

Major Takeaway: The bill makes significant improvements to the accountability system, but could further be improved by codifying other evaluative metrics.

WINS FOR STUDENTS: The bill strengthens provisions designed to protect students by requiring all career education providers to get at least 15% of their income from non-federal sources, closes the GI bill loophole that doesn’t count those dollars as “federal,” requires schools to spend at least half of their aid on instruction, and prohibits institutions from including forced arbitration clauses and class action bans in their enrollment contracts. The bill also revamps the overall accountability system for all institutions by changing the responsibilities of state authorizing agencies and accreditors and expanding and reforming the metric that measures the amount of student loan defaults on loans issued to attend a given institution. It also enshrines key elements of the 2016 borrower defense regulation into law that protect misled and defrauded borrowers, allowing for them to apply to have their federal loans forgiven.

WHAT SHOULD COME NEXT?: While the reforms put in place are useful and valuable, Young Invincibles has articulated a different approach focusing on student loan repayment rates, overall institutional success rates and direct aid to struggling borrowers. Finally, Young Invincibles supports the 2015 gainful employment rule and would like to see the accountability provisions for career education programs contained within that rule codified in any final HEA reauthorization.

Expanded CCAMPIS:

Major Takeaway: The bill increases funding for on-campus childcare for student parents.

WINS FOR STUDENTS: Despite a recent bipartisan $35 million increase to the CCAMPIS program, which provides on-campus child care to student parents, the PROSPER Act proposed returning the program to its previous funding level of $15 million – a sum that Democrats and Republicans alike agreed was too low in light of the growing child care needs of the over one million student parents in America. The Aim Higher Act builds on the increase in the omnibus by increasing authorized funding for the program by $17 million to to $67 million, allowing for more students to access the childcare support they need to complete a degree.

WHAT SHOULD COME NEXT?: The funding increase in the Aim Higher Act is needed and appreciated for student parents pursuing a better life for themselves and their children. However, given that an estimated 25% of today’s students are parents, the cost to fulfill student parent need for high-quality, affordable, on-campus child care is much greater than $67 million. Any reauthorization of the Higher Education Act should include additional CCAMPIS funding increases to create additional paths for two generation support and success.

Increased transparency and information for students and families:

Major Takeaway: The bill repeals the student unit record ban and creates a student-level data network to help students make better decisions.

WINS FOR STUDENTS: The bill would create a student-level data network that would allow students and families to learn more about the quality of schools when deciding to enroll and how to finance their education. The system would allow students to drill down on how effective institutions are in educating students who have similar backgrounds and interests, as well as how frequently students are employed after graduating. The bill also calls for privacy and security protections, such as following the federal standards set out by the National Institute Standards and Technology, banning the collection of sensitive data like religious affiliation, and prohibiting the data to be used for law enforcement activities or to be sold to third-parties.

WHAT SHOULD COME NEXT?: The bill should codify and fund the maintenance of any tools used to communicate important information about college enrollments, cost, graduation rates, workplace outcomes, and demographic data to students and families. Having a one-stop repository of information empowers both the individual as well as counselors and advocates to make the best decision for them when considering higher education.

Campus voter registration:

Major Takeaway: The bill protects the current, limited requirements in the Higher Education Act that schools have to help their students register to vote, but could make improvements to the law in that area.

WINS FOR STUDENTS: Currently, the Higher Education Act requires college and universities to make a “good faith effort” to make voter registration forms “widely available.” The PROSPER Act would further narrow that very minimal requirement; one that could currently be satisfied by sending a single email to students every two years or by having a stack of paper forms located somewhere on campus. The Aim Higher Act rejects the language in the PROSPER Act targeting student voting and ensures that the few existing guidelines stay in place.

WHAT SHOULD COME NEXT?: All policymakers, higher education leaders, and college administrators should agree: making sure students can register and vote makes our democracy stronger and institutions of higher education have a responsibility to make that process accessible to their students. The Help Students Vote Act (HSVA), introduced in the House and Senate earlier this year, would bolster the existing provision by helping schools more effectively reach students at key points in the electoral process and facilitate increased voter participation. Under the HSVA, schools would take simple steps including emailing students twice a year before voter registration deadlines for both general and primary elections, and designating a “campus vote coordinator” to liaise directly with students around campus voting efforts. HSVA would also ensure that the guidelines apply to schools in every state, and have a mechanism for holding schools accountable. Any future reauthorization of the Higher Education Act would be strengthened by incorporating the provisions of the HVSA to increase students’ access to the democratic process.