Committee Chair Seeks To Overhaul Federal Aid

, Malcolm A. Kline, 1 Comment

U. S. Rep. Virginia Foxx, R-NC, is seeking to overhaul America’s cumbersome system of federal aid to education.

She is one of the backers of the PROSPER Act now making its way through Congress. “College students now pick from six types of federal loans, nine repayment plans, eight forgiveness programs, and 32 deferment and forbearance options,” Kari Travis reports in The Carolina Journal. “The HEA[Higher Education Act] is overdue for a makeover, Foxx told Carolina Journal in an exclusive interview.”

“The PROSPER Act would gut Stafford and PLUS loans from the system, replacing them with an unsubsidized Federal ONE Loan. Additionally, all federal grants — except for the Pell Grant — would be thrown out.” PROSPER stands for Promoting Real Opportunity, Success, and Prosperity through Education Reform.

“America’s student debt topped $1.3 trillion in 2017, show data from the Pew Research Center,” Travis reports. “In 2011, roughly two-thirds of college seniors between the ages of 18-24 took out loans.”

“Median student loan debt in the U.S. is about $20,000.”

 

One Response

  1. Camus Groth

    February 8, 2018 8:21 pm

    Thanks for your brief article Malcolm.

    It’s time for Congress to bring fairness and efficiency to the Byzantine world of graduate student finance? By eliminating the Grad PLUS loan program, Congress can: (1) help control the cost of higher education by limiting the hefty federal subsidies graduate and professional students are allowed to receive: (2) provide access to more equitable financing options; (3) help bring down college costs; (4) increase the incentive for graduate and professional schools to price their programs according to their market value; (5) help promote accountability for poorly-performing graduate and professional schools; and (6) enable graduate and professional students to better assess the market value of their chosen programs before attending school. Ending the Grad PLUS loan program will not prevent graduate or professional student from accessing funding via the new One Loan Program called for in the PROSPER Act. But the coupling of Grad PLUS loans for graduate and professional students with loan forgiveness and multiple repayment plans unequivocally encourages over-borrowing and frees schools from the responsibility to charge prices that actually match the market value of the degrees/credentials they offer. Also, while federal student loans certainly help facilitate access to undergraduate education, they should not guarantee access to any graduate and professional institution at any price. As long graduate students can borrow to attend any accredited institution at any price, no matter what the quality of the degree or certificate program is, student debt will increase, college costs will increase, and student success rates will decrease.

    If nearly all (92%) traditional graduate and professional students are successfully managing their federal and private student loans, where is the proverbial “disturbance in the force” that validates a rational need for continuing federal intervention in the graduate and professional student loan market? Clearly, the imperfections in the graduate and professional student loan market that would constitute the only legitimate reason why government should intervene in this market simply do not exist. There are no imperfections, just distortions.

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