Congressional Digest

Tag: Student Loans

    Pros and Cons of Canceling Student Loan Debt

President Joe Biden took steps toward making good on a campaign promise to tackle student loan debt this spring. The move, however, faced critics from the left, with some saying the president had not gone far enough to help debt-burdened graduates, and the right, which argued that the government should not waive student debt. In March, the Biden administration announced that it would cancel $1 billion in student loan debt for 72,000 borrowers who attended schools that closed abruptly or that used illegal or deceptive practices. The move streamlined the process for borrowers applying for assistance after a Trump-era policy…

    Student Loan Application Process

August 21, 2016
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Prospective students use the Free Application for Federal Student Aid (FAFSA) to apply for Federal student financial aid, as well as for aid from State governments and most colleges and universities. According to a 2015 report from the college financing website Edvisors, however, an estimated 2 million low-income students would have qualified for a Federal Pell grant, but failed to correctly fill out or complete the FAFSA — a lengthy form with more than 100 questions. Congress has taken note, and both Republicans and Democrats have introduced legislation to simplify the process and the application. Senate Health, Education, Labor, and…

    Boosting College Savings Plans

June 01, 2016
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There is a new, bipartisan drive in Congress to expand what are known as 529 education savings accounts by offering a tax credit for annual contributions to such accounts by low- and middle-income families. A 529 plan, otherwise known as a “qualified tuition plan,” is an education savings account designed to help families set aside funds for future education costs. The plans are sponsored by States or educational institutions and are authorized by Section 529 of the Internal Revenue Code. The Boost Savings for College Act, introduced by Senators Richard Burr (NC-R) and Bob Casey (PA-D), would provide a tax…

    For-Profit Colleges

November 24, 2015
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Over the past six years, the U.S. Department of Education has established tougher regulations targeting for-profit, or career colleges — institutions that operate as a business, often have shareholders, and derive most of their revenue from taxpayer-funded student financial aid. Among other actions, the Department has issued “gainful employment” regulations (also applied to community colleges and public universities), intended to help ensure that students at career colleges don’t end up with debt they cannot repay. The rule requires colleges to track their graduates’ performance in the workforce and eventually will cut off Federal funding for career training programs that fall…

    Student Loan Repayment

April 16, 2015
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Many Americans have outstanding undergraduate student loans with interest rates of 7 percent or higher; however, those who took out loans during the 2013-2014 school year pay a rate of 3.86 percent under the Bipartisan Student Loan Certainty Act, passed by Congress in 2013. On March 18, 2014, Senators Elizabeth Warren (MA-D) and Representative Joe Courtney (CT-D) introduced the Bank on Students Emergency Loan Refinancing Act. The legislation would allow those with college loan debt to refinance at the lower interest rates. The rates would be slightly higher for graduate student loans. The cost would be paid for by requiring…

    Controlling College Costs — The Latest on Reducing Loan Rates, Debt, and Tuition

September 04, 2013
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From 2000 to 2011, the cost of undergraduate tuition, room, and board rose 42 percent at public institutions and 31 percent at private not-for-profit institutions after adjusting for inflation, according to the U.S. Department of Education. The Consumer Financial Protection Bureau estimates that, as of May 2013, outstanding student loan debt was approaching $1.2 trillion. No one disputes that the situation is out of control, and there is no shortage of proposals from Congress and the White House to control costs and reduce student loan debt. New Student Loan Interest Rates On August 9, President Barack Obama signed into law…

    In the Nick of Time, Congress Approves Transportation Bill, Preserves Student Loan Rates

Right before adjourning for the Fourth of July recess, congressional leaders agreed to a two-year reauthorization of highway, transit, and surface transportation programs, as well as a deal that prevented the doubling of interest rates for new student loans. It was crucial that Congress act on these two measures by the end of June; otherwise, current authority for highway and mass transit projects would have elapsed, potentially jeopardizing 2.9 million jobs, and interest rates on Federal subsidized loans would have jumped from 3.4 percent to 6.8 percent for more than 7 million students. First Transportation Bill Reauthorization Since 2005 Enactment…

    Down to the Wire on Student Loan Rates

June 03, 2012
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Unless Washington lawmakers intervene, subsidized Stafford student loan rates will double next month to 6.8 percent. Although President Obama and the presumptive Republican presidential nominee, Mitt Romney, have both said that Congress must act, Democrats and Republicans so far have been unable to agree on how to offset the $5.9 billion cost of extending the current 3.4 percent rate for one year. How did this happen? In 2007, Congress passed and President George W. Bush signed into law a bill that reduced the interest rate on subsidized Stafford loans, but only until July 1 of this year. With one out…

    Paying for Student Loan Rate Cuts Is Point of Contention

April 29, 2012
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Approximately 7.4 million students will see their Federal student loan rates double on July 1 if Congress fails to pass legislation to keep rates at the current 3.4 percent. A law passed in 2007 reduced the interest rate on subsidized Stafford Loans to undergraduate students for four academic years. Unless the interest rate break is continued, the average student will pay an additional $1,000 in interest each year. On his recent visits to universities, President Obama called on Congress to extend the rate cut. Although his presumptive Republican opponent, Mitt Romney, also urged lawmakers to act, the issue has since…

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