Latest news with #TheInstituteforCollegeAccessandSuccess
Business Insider
29-04-2025
- Business
- Business Insider
The new GOP plan for student-loan borrowers: longer repayment periods and fewer options for debt relief
House Republicans' education plan would mean sweeping changes — and fewer avenues for relief — for millions of student-loan borrowers. Rep. Tim Walberg, chair of the House education committee, unveiled on Monday the committee's legislation to reshape education and the student financial aid system. The 100-page budget bill would have big implications for student-loan borrowers — if passed, the bill would scrap existing affordable repayment plans and penalize colleges that load students up with unaffordable debt. The committee said in a press release that the bill is intended to save over $330 billion by "strengthening accountability for students and taxpayers, streamlining student loan options, and simplifying student loan repayment." "The bill also includes other reforms that will lower costs for students and families while ensuring the fiscal sustainability of targeted programs like the Pell Grant," Walberg said in a statement. "Bottom line, it's time to fix this broken cycle that is costly to taxpayers and leaves students worse off than if they never went to college." One proposal within the bill calls for condensing the existing repayment plans into just two plans: one of them is a standard repayment plan with a fixed monthly payment amount over a fixed period of time, and the second option is what the legislation calls the Repayment Assistance Plan, which allows for loan cancellation after 360 qualifying payments. The plan ensures that borrowers who are consistent with their monthly payments would not see their balances increase due to interest. Notably, the bill would eliminate former President Joe Biden's SAVE plan. Biden created the plan in 2023 to give borrowers cheaper monthly payments with a shorter timeline to debt relief, but it's currently blocked in court, and President Donald Trump's administration said it would not revive the plan. The bill also proposed eliminating federal direct PLUS student loans, which allow parents and graduate or professional students to borrow up to the full cost of attendance for their programs. Those starting their education on or after July 1, 2026, would not be eligible for PLUS loans, which have the highest interest rate of all federal loans. Other provisions in the bill include measures to hold colleges financially accountable if students take out debt they cannot afford, along with expanding the Pell Grant to low-income students in short-term programs while removing access to the grant for students enrolled in under six credit hours. Some advocates criticized the GOP proposal. Aissa Canchola Bañez, policy director at the advocacy group Student Borrower Protection Center, said in a statement that "this is a return to the worst failures of the past: 30 years of traps, tricks, and broken promises, where only a handful of borrowers ever see relief." Sameer Gadkaree, president and CEO of The Institute for College Access and Success, said in a statement that the GOP's "current proposal would severely restrict college access by slashing financial aid programs, eliminating basic consumer protections, and making it harder to repay student loan debt." The bill is being marked up on Tuesday and is still subject to change. It comes as Trump's administration seeks to overhaul higher education; also on Tuesday, the Department of Education is holding public hearings on its proposal to limit eligibility for Public Service Loan Forgiveness. The department is also restarting collections on defaulted student loans beginning May 5, after a five-year pause. "As we plan for the department's future, we won't leave the loan portfolio in disarray," Education Secretary Linda McMahon wrote in The Wall Street Journal. "We are committed to ensuring that borrowers are paying back their loans, that they are fully supported in doing so, and that colleges can't create such a massive liability for students and their families, jeopardizing their ability to achieve the American dream."
The Independent
09-02-2025
- Business
- The Independent
Threat of taxes on scholarships and changes to student loans under Trump plans
Republican lawmakers are exploring controversial proposals targeting higher education to offset the cost of extending Trump-era tax cuts. These include potentially taxing college scholarships, eliminating student loan repayment plans, and significantly increasing taxes on university endowments. The proposals, currently circulating within House committees, are part of a broader effort to identify spending cuts and revenue streams. While still in the early stages, and with no guarantee of implementation, the mere consideration of such measures has sparked widespread concern among higher education advocates. They argue that these changes could dramatically reshape the landscape of college affordability and accessibility. 'It's shocking to me because this amount of cuts is not happening in reaction to like a budget crisis, like a recession. This really feels different in the sense that it is not something that there is an external push or a need for. So, it feels more ideological in a way,' said Jessica Thompson, a higher education policy expert with The Institute for College Access and Success. Here is a look at possible federal budget cuts that would affect higher education under the Trump administration: Cutting programs that help students pay off college debt The U.S. House Committee on Education and the Workforce has suggested several possible ways to overhaul student loan programs. Some would reduce student access to federal aid for college. On the chopping block potentially are several plans students can opt into to repay their students loans, including the SAVE plan introduced by the Biden administration. That plan doesn't require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person — and prevents interest from adding to balances as long as borrowers make their monthly payments. The SAVE plan was already put on hold after Republicans challenged it. Some plans do not appear to be targeted, including one that caps loan payments based on borrowers' income level. Another possible change would give borrowers additional opportunities to recover from defaults. While they currently can rehabilitate their loans just once, allowing them to make a certain number of consecutive payments to get out of default, the proposal would allow them to go through that process twice. The committee projected the new process could save the government millions of dollars but did not spell out how. The timing is uncertain on when any of these proposals could surface. They could be considered as soon as this spring in a process known as budget reconciliation that would allow Republicans to squeeze proposals through Congress purely on party-line votes. That would not be easy in the House, where Republicans hold the majority by just a few seats. An end to tax-free status for scholarships Scholarships and fellowships have been exempt from taxes as long as they are used for tuition and related expenses. That would change under another proposal that's up for consideration. The changes could create new financial burdens for students and families, advocates say. 'There's been great progress in bringing down the costs of higher education. Adjusted for inflation, public university tuition is less now than it was ten years ago,' said Craig Lindwarm, senior vice president of governmental affairs with the Association of Public and Land-Grant Universities. 'But as we look at some of the proposals that are options, many would increase costs on students and families, and I think (the proposals) are heading in the direction that most don't want to see, which is increasing expenses on students and families.' The Tax Cuts and Jobs Act currently requires some private nonprofit colleges and universities to pay a 1.4% tax on income from their endowments, which raised about $244 million from 58 institutions in 2022. The committee suggests increasing that to a 14% tax and expanding which colleges would have to pay it. Also being considered among hundreds of other ideas in circulation are fines for colleges and universities that violate students' rights under Title VI of the Civil Rights Act, which protects against discrimination toward students of shared ancestry. Such investigations often have been resolved through settlements calling for training and policy updates. Title VI is currently what is being used to investigate complaints of antisemitism on college campuses across the U.S.
Yahoo
09-02-2025
- Business
- Yahoo
House Republicans mull taxes on scholarships and changes to student loan programs
As Republicans in Congress look for ways to slash spending, some legislators are floating new taxes on college scholarships, an end to student loan repayment plans and a big hike in taxes on university endowments. The ideas affecting higher education are among many in circulation among House committees that are exploring ways to cover the cost of extending and expanding tax cuts passed in President Donald Trump's first term. The recommendations are still evolving, and it's unclear how close any of them will get to being implemented. Regardless, advocates across higher education say they are alarmed to see such proposals gain traction at all with Republicans. 'It's shocking to me because this amount of cuts is not happening in reaction to like a budget crisis, like a recession. This really feels different in the sense that it is not something that there is an external push or a need for. So, it feels more ideological in a way,' said Jessica Thompson, a higher education policy expert with The Institute for College Access and Success. Here is a look at possible federal budget cuts that would affect higher education under the Trump administration: Cutting programs that help students pay off college debt The U.S. House Committee on Education and the Workforce has suggested several possible ways to overhaul student loan programs. Some would reduce student access to federal aid for college. On the chopping block potentially are several plans students can opt into to repay their students loans, including the SAVE plan introduced by the Biden administration. That plan doesn't require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person — and prevents interest from adding to balances as long as borrowers make their monthly payments. The SAVE plan was already put on hold after Republicans challenged it. Some plans do not appear to be targeted, including one that caps loan payments based on borrowers' income level. Another possible change would give borrowers additional opportunities to recover from defaults. While they currently can rehabilitate their loans just once, allowing them to make a certain number of consecutive payments to get out of default, the proposal would allow them to go through that process twice. The committee projected the new process could save the government millions of dollars but did not spell out how. The timing is uncertain on when any of these proposals could surface. They could be considered as soon as this spring in a process known as budget reconciliation that would allow Republicans to squeeze proposals through Congress purely on party-line votes. That would not be easy in the House, where Republicans hold the majority by just a few seats. An end to tax-free status for scholarships Scholarships and fellowships have been exempt from taxes as long as they are used for tuition and related expenses. That would change under another proposal that's up for consideration. The changes could create new financial burdens for students and families, advocates say. 'There's been great progress in bringing down the costs of higher education. Adjusted for inflation, public university tuition is less now than it was ten years ago," said Craig Lindwarm, senior vice president of governmental affairs with the Association of Public and Land-Grant Universities. "But as we look at some of the proposals that are options, many would increase costs on students and families, and I think (the proposals) are heading in the direction that most don't want to see, which is increasing expenses on students and families.' Increasing taxes on college endowments The Tax Cuts and Jobs Act currently requires some private nonprofit colleges and universities to pay a 1.4% tax on income from their endowments, which raised about $244 million from 58 institutions in 2022. The committee suggests increasing that to a 14% tax and expanding which colleges would have to pay it. Also being considered among hundreds of other ideas in circulation are fines for colleges and universities that violate students' rights under Title VI of the Civil Rights Act, which protects against discrimination toward students of shared ancestry. Such investigations often have been resolved through settlements calling for training and policy updates. Title VI is currently what is being used to investigate complaints of antisemitism on college campuses across the U.S. ___ Mumphrey reported from Phoenix. AP education writer Collin Binkley in Washington, D.C., contributed to this report. ___ The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at Cheyanne Mumphrey, The Associated Press
Associated Press
09-02-2025
- Business
- Associated Press
House Republicans mull taxes on scholarships and changes to student loan programs
As Republicans in Congress look for ways to slash spending, some legislators are floating new taxes on college scholarships, an end to student loan repayment plans and a big hike in taxes on university endowments. The ideas affecting higher education are among many in circulation among House committees that are exploring ways to cover the cost of extending and expanding tax cuts passed in President Donald Trump's first term. The recommendations are still evolving, and it's unclear how close any of them will get to being implemented. Regardless, advocates across higher education say they are alarmed to see such proposals gain traction at all with Republicans. 'It's shocking to me because this amount of cuts is not happening in reaction to like a budget crisis, like a recession. This really feels different in the sense that it is not something that there is an external push or a need for. So, it feels more ideological in a way,' said Jessica Thompson, a higher education policy expert with The Institute for College Access and Success. Here is a look at possible federal budget cuts that would affect higher education under the Trump administration: Cutting programs that help students pay off college debt The U.S. House Committee on Education and the Workforce has suggested several possible ways to overhaul student loan programs. Some would reduce student access to federal aid for college. On the chopping block potentially are several plans students can opt into to repay their students loans, including the SAVE plan introduced by the Biden administration. That plan doesn't require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person — and prevents interest from adding to balances as long as borrowers make their monthly payments. The SAVE plan was already put on hold after Republicans challenged it. Some plans do not appear to be targeted, including one that caps loan payments based on borrowers' income level. Another possible change would give borrowers additional opportunities to recover from defaults. While they currently can rehabilitate their loans just once, allowing them to make a certain number of consecutive payments to get out of default, the proposal would allow them to go through that process twice. The committee projected the new process could save the government millions of dollars but did not spell out how. The timing is uncertain on when any of these proposals could surface. They could be considered as soon as this spring in a process known as budget reconciliation that would allow Republicans to squeeze proposals through Congress purely on party-line votes. That would not be easy in the House, where Republicans hold the majority by just a few seats. An end to tax-free status for scholarships Scholarships and fellowships have been exempt from taxes as long as they are used for tuition and related expenses. That would change under another proposal that's up for consideration. The changes could create new financial burdens for students and families, advocates say. 'There's been great progress in bringing down the costs of higher education. Adjusted for inflation, public university tuition is less now than it was ten years ago,' said Craig Lindwarm, senior vice president of governmental affairs with the Association of Public and Land-Grant Universities. 'But as we look at some of the proposals that are options, many would increase costs on students and families, and I think (the proposals) are heading in the direction that most don't want to see, which is increasing expenses on students and families.' Increasing taxes on college endowments The Tax Cuts and Jobs Act currently requires some private nonprofit colleges and universities to pay a 1.4% tax on income from their endowments, which raised about $244 million from 58 institutions in 2022. The committee suggests increasing that to a 14% tax and expanding which colleges would have to pay it. Also being considered among hundreds of other ideas in circulation are fines for colleges and universities that violate students' rights under Title VI of the Civil Rights Act, which protects against discrimination toward students of shared ancestry. Such investigations often have been resolved through settlements calling for training and policy updates. Title VI is currently what is being used to on college campuses across the U.S. ___ ___
