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New legislation seeks debt-free college degrees and real career opportunities

By Charlene Crowell

If 17 Members of the U.S. House Committee on Education and the Workforce can convince their fellow lawmakers of a comprehensive approach to higher education, every student across the country could gain the chance to earn a debt-free degree and a rewarding career.

The Aim Higher Act, introduced on July 24, proposes several significant improvements to higher education:

  • Improves college affordability by investing more in federal student aid, and incentivizes states to reinvest in higher education;
  • Cracks down on predatory for-profit institutions that target students and veterans with expensive, low-quality programs;
  • Protects and expands the Public Service Loan Forgiveness program to make student loans simpler and easier to repay;
  • Provides students the tools they need to graduate on time with a quality degree; and
  • Invests in teachers and school leaders to improve training and quality of our schools.

Commenting on the legislation, Congressman Bobby Scott (VA-03) noted, “It provides immediate and long-term relief to students and parents struggling with the cost of college. It puts a greater focus on helping students graduate on time with a quality degree that leads to a rewarding career. And it cracks down on predatory for-profit colleges that peddle expensive, low-quality degrees at the expense of students and taxpayers.”

Congressman Scott also noted that the bill modernizes financial aid, and the importance of a quality education, whether it was at a four or two-year curriculum.

Those observations should strike a chord with the 44 million consumers with outstanding student loan debts that together total $1.5 trillion. Without serious intervention on the part of Congress, the cost of higher education will continue to climb, and with it both the number of borrowers and the nation’s collective indebtedness.

The measure also attracted support from a wide array of education stakeholders who promptly chimed in with their respective support.

“The cost of a college degree is rising at three times the rate of inflation,” said Randi Weingarten, President of the American Federation of Teachers. “Predatory for-profit colleges continue to scam our nation’s veterans, minorities, and other student loan borrowers…The Aim Higher Act takes some important steps forward toward making higher education a more affordable, accessible reality for everyone.”

“For too long, for-profit colleges have failed to serve the educational purpose for which they were intended,” added Ashley Harrington, a Policy Counsel with the Center for Responsible Lending. “The combin- ation of high costs and low graduation rates by these bad actors have resulted in unfair burdens for student borrowers and taxpayers. This bill improves accountability for all higher education institutions and creates a sensible path to fix our broken student loan repayment system.”

In the early 1990s, when 22 percent of students were defaulting on their loans, Congress passed a package of reforms that drove down defaults. Yet another surge of abuses led to additional reforms in 2008 and 2009.

Earlier this year, a diverse 86-member coalition of organizations began working on behalf of students, consumers, veterans, service members, faculty and staff, civil rights, and college access. Together, they advocated for integrity and consumer protections in higher education.

Additionally, in March of this year, 31 state attorneys general (AGs) urged Capitol Hill lawmakers to enact legislation that would allow federal and state governments to work in cooperation to effectively respond to the student loan crisis that at the time included a loan default rate larger than any other loan category: 11 percent.

“The states have the institutional capacity, the legal framework, and the track record to protect their residents from abuses in the student loan market. The Department [Education] does not,” wrote the AGs who represented the following states: California, Colorado, Connecticut, Dela-ware, District of Columbia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, New Mexico, North Carolina, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia and Washington State.

It just seems sensible that every student borrower deserves to know, before a loan is incurred, how interest accumulates, when repayments begin, and the eligibility requirements for income-based repayments. Unfortunately, poor servicing practices have exacerbated, rather than clarified loan obligations – particularly in repayment. Another key provision of the Aim Higher Act is to efficiently and accurately report data that is more useful for students and families.

As Mildred Garcia, President of the American Association of State Colleges and Universities recently remarked, “The Aim Higher Act’s financial aid provisions would ensure that today’s students –and generations to come – could attain the American Dream.”

Here’s hoping Congress will take timely actions to advance the Aim Higher Act. Making higher education accessible, accountable, and financially manageable would benefit the entire country.

Charlene Crowell is the Center for Responsible Lending’s Communications Deputy Director. She can be reached at [email protected].

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