LegiStorm

Summary:

During the 118th Congress, the House Committee on Education and the Workforce marked up and ordered reported the College Cost Reduction Act (CCRA; H.R. 6951). Most of the bill’s provisions would amend the Higher Education Act of 1965 (HEA; P.L. 89-329, as amended), though it is not a comprehensive reauthorization of the HEA. Nevertheless, the bill would make policy changes affecting a wide array of postsecondary education issues. H.R. 6951 signals an attempt to apply downward pressure on the cost of postsecondary education by changing how federal student aid is calculated and awarded, curtailing the availability of some student aid programs, implementing an institutional accountability framework, and providing expanded consumer information, among other policy changes. Title I of H.R. 6951 would authorize the Secretary of Education (the Secretary) to develop a standardized form and terminology for financial aid offers that institutions of higher education (IHEs) receiving federal financial assistance under the HEA would be required to use. The bill would also phase out the College Navigator website and direct the Secretary to make several updates to the College Scorecard website and create a new Universal Net Price Calculator, which would provide personalized information akin to what is included in the standardized financial aid offer form, as well as a cumulative measure of the net price required for completion for any IHE and its programs of study. Additionally, the bill would amend Section 132 of the HEA to authorize the National Center for Education Statistics to develop a postsecondary student-level data system covering only students who received HEA Title IV student financial aid (e.g., Pell Grants, Direct Loans) and students who received military and veteran education benefits. Title II would change how a student’s financial need is calculated by replacing “cost of attendance” in the need calculation with a new “median cost of college” metric, making a student’s calculated need equal across IHEs for a given program of study. Federal Pell Grant awards would be capped at the median cost of college for a student’s program of study, and annual Direct Loan amounts generally would be capped at the median cost of college minus the value of a student’s Pell Grant award, as applicable. The bill would also terminate the authority of the Leveraging Educational Assistance Partnership program and authorize new performance-based grants known as Promoting Real Opportunities to Maximize Investments and Savings in Education (PROMISE) Grants. To receive a PROMISE Grant, IHEs would be required to publish a maximum total price guarantee. PROMISE Grant amounts would be determined based on completers’ earnings, the maximum total price, the dollar amount of Pell Grants awarded, and the number of students who completed a program of study within 100% of the program length, or who transferred from a two-year to a four-year institution. H.R. 6951 would make several additional changes to the federal Direct Loan program. Authority to make new PLUS Loans to graduate students and to parents of dependent undergraduate students would be terminated, annual and cumulative loan limits would be modified, interest capitalization would be eliminated, origination fees would be eliminated, and loan rehabilitation would be made available to eligible borrowers two times instead of once. The bill would also replace the existing assortment of loan repayment plan options with a set of two: one standard 10-year year repayment plan and a new repayment assistance plan. The new repayment assistance plan would, among other features, include principal and interest subsidies for qualifying borrowers. Title III would create a new risk-sharing framework in which institutions would be responsible for making reimbursement payments to the federal government based on the nonrepayment of its federal student loan borrowers. Additionally, the bill would repeal several U.S. Department of Education regulations and limit the Secretary’s authority to issue new ones. H.R. 6951 would also amend requirements for accrediting agencies in an effort to support innovative education program delivery and more stringent accreditation processes and standards. Additionally, the bill would make policy changes related to student transfers and codify the Postsecondary Student Success Grants program, which has been authorized annually under appropriations acts and administered under the Fund for the Improvement of Postsecondary Education. The Congressional Budget Office estimates the bill would result in budgetary savings of $185.5 billion in direct spending over a 10-year period, primarily stemming from the elimination of existing IDR plans in the Direct Loan program, the elimination of PLUS Loans and the institution of new limits on student loan borrowing, the repeal of certain regulations, and a projected reduction in student borrowing as a result of the bill’s institutional risk-sharing policy.