A bill that seeks to overhaul higher education and force institutions to have financial skin in the game by making them partly responsible for student loan debt has advanced in the Republican-controlled House.
The College Cost Reduction Act was approved by the Committee on Education & the Workforce on Jan. 31 and now must be scheduled for a full vote in the U.S. House of Representatives.
“As a society, it is time to face the music. We are scamming young Americans. College prices are skyrocketing, and college value is stagnating,” said North Carolina Rep. Virginia Foxx, chair of the committee, in her opening remarks.
Foxx said her bill’s “three-pronged solution” includes that colleges would be “held responsible for debt held by graduates who didn’t get enough value from their degree to pay down student loans.”
In other words, universities would be held accountable for unpaid student loans, with the legislation being billed as a “risk-sharing proposal.”
Foxx also said it will increase transparency as well as direct federal aid to colleges and universities “with the best track record of increasing graduate earnings.”
The bill seeks to standardize offer letters for financial aid and set limits on student loans for certain degree programs. Repayment plans for student loans would either be income-driven or a standard 10-year plan, Insider Higher Ed reported.
“The 223-page College Cost Reduction Act passed on a party-line vote after a more than four-hour markup Wednesday that included more than 30 proposed amendments from Democrats on the committee—all of which were voted down by the majority Republicans,” IHE reported.
According to the Education and Workforce Committee fact sheet, the College Cost Reduction Act “promotes economic mobility” and “prevents colleges from endlessly raising tuition.”
The bill seeks to update the Higher Education Act, which was signed by President Lyndon B. Johnson in 1965. The act sought to improve financial assistance and resources in postsecondary and higher education.
“The next step is a vote on the House Floor,” said Chairwoman Foxx’s Communication Director on the Education and Workforce Committee, Audra McGeorge, in an email response to The College Fix.
On the question of when the bill will go to a floor vote, McGeorge told The Fix the timing is uncertain, as “leadership decides what and when bills come up for a vote.”
Democrats have voiced concerns about the bill, arguing it’s a “recipe for disaster” and that it “would negatively impact first-generation and low-income students,” Inside Higher Ed reported.
But fiscal conservatives love it.
“The College Cost Reduction Act will likely save taxpayers $1.9 billion per year by redistributing federal resources between institutions,” stated scholar Preston Cooper in a piece for the Foundation for Research on Equal Opportunity.
Student debt currently exceeds $1.7 trillion, according to the Federal Reserve. In early 2006, total student debt was less than one-third of the amount it is now.
The bill may have trouble in a Democratic-majority Senate, as it “contains a number of conservative policy priorities – such as barring accrediting agencies from requiring institutions to adhere to diversity, equity, and inclusion standards,” according to Inside Higher Ed.
The College Fix reached out to the Vice President for Public Affairs and Strategic Communications at the American Council on Education, Jon Riskind, who forwarded the council’s official response.
The American Council on Education said the bill “is unlikely to be taken up in the Senate, reflecting broader political disagreements over the future of federal student aid and higher education reform.”
Originally published by The College Fix. Republished with permission.
For more great content from School Reform News.
For more from The Heartland Institute.
