Today the House of Representatives will vote on the College
Opportunity and Affordability Act. The
legislation contains several important policy changes to reform private student
loan policy, critical grant programs and lower the cost of textbooks. In addition the House will vote on an
amendment to provide private student loan borrowers with basic bankruptcy
protections.
The College Opportunity and Affordability Act includes provisions to:
Provide the nucleus of meaningful reform to the private
student loan system. The
legislation helps ensure students maximize their federal loans before taking out
private loan debt by notifying them clearly and repeatedly about their
eligibility for federal aid, banning co-branding of private loans, and ensuring
that private loans are separated from federal loans in financial aid packaging. H.R. 4137 helps students understand their
private loan offers by mandating lenders provide a uniform loan statement
describing the rate and terms of the loan and making all private loans subject
to the Truth in Lending Act (TILA). The
bill mandates all private loans be certified by institutions to help prevent
over-borrowing of student loans. In
Finally the bill begins to provide private loan borrowers with some basic
protections including a 30-day period after the loan is offered where the terms
cannot change and a three-day delay between consummation and disbursement.
Help increase
college opportunity by strengthening the Pell Grant Program, our nation’s
most successful college access program.
This bill will increase the maximum authorized level for the Pell Grant to
$9,000, charting a path to regaining the buying power of the maximum Pell award
lost over the last thirty years. In
addition the legislation allows students who have accelerated their studies to
receive two Pell Grants in a calendar year, the so-called “Year Round Pell”
provision. Together these changes will
help move this valuable program in the right direction.
Help lower the cost of textbooks for millions of
students. The bill mandates publishers disclose the
price of textbooks when they sell them to faculty as well as additional
information about the book’s history of revisions. In addition publishers must sell books and
supplemental materials unbundled, ending a practice that drives up the cost of
textbooks for many students. Lastly,
this bill includes language to encourage schools to share information about
textbooks with students so that they have time to shop around.
Begin the process of reforming the FAFSA form. The
Free Application for Federal Student Aid should help low and middle-income
students access valuable student aid.
Unfortunately the complexity of this form keeps approximately one and a
half million aid eligible students from accessing meaningful student
assistance. The bill begins the process
of simplifying the financial aid application by reducing the number of
questions and encouraging the Secretaries of Education and Treasury to
investigate ways to calls on the Secretaries of Education and Treasury to
develop a simple process for drawing the needed income information directly
from the IRS.
Two notable
amendments that will receive votes:
Representative
Danny Davis’s amendment ends
an unfair policy of special bankruptcy treatment for lenders who saddle
students and their families with high-risk, high-cost private student loans. Over
the past decade private, non-federal student lending has grown
significantly. These loans are more
expensive, have more stringent repayment requirements, and provide fewer
protections than federal loans.
Moreover, private student loans exacerbate student indebtedness because
they provide the worst rates and terms to those students with the greatest
financial need. This result directly
contradicts the public policies underlying the federal student aid system,
which attempts to place a college education within reach of low and
middle-income students. The Davis amendment would
allow borrowers to discharge their loans in bankruptcy after five years in
repayment.
Representative
Lloyd Doggett’s amendment
allows student and families to use IRS data to simplify the FAFSA filing
process. The FAFSA form should be a tool
of college access rather than an impediment for families confused by the long
and complicated form. This amendment
takes important steps towards allowing the IRS to use existing tax data to help
fill out (pre-populate) much of the FAFSA form, making the process easier and
more clear.
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The State PIRGs are non-profit, non-partisan public
interest advocacy groups. The Higher Education Project was established in 1994
to secure more aid for students, with a focus on additional grants, reduced
debt, and better service to students in the federal financial aid system.
