Inequities in affordability; plan for simpler income-driven repayment; IRS tool for borrowers back online soon

Roadmap for Streamlining and Improving Income-Driven Repayment for Federal Student Loans
Lowest Income Students Face Highest Cost Burdens at 2- and 4-Year Public Colleges in All 50 States
Congress Sends Mixed Message on Pell Grants
IRS Data Retrieval Tool Outage Complicates Financial Aid Applications and Student Loan Repayment for Millions, Back Online for Borrowers Soon
Issue Brief on College Risk Sharing
Thanks for Telling Congress to #DefendCFPB


Roadmap for Streamlining and Improving Income-Driven Repayment for Federal Student Loans

Last week TICAS released a practical roadmap for designing an income-driven repayment (IDR) plan that works better for both students and taxpayers. With longstanding bipartisan support for IDR, there’s also agreement on the need to simplify and improve it, but not on how best to proceed. Some approaches to IDR reform could harm the lowest income borrowers or have unintended consequences for college costs and debt. Make it Simple, Keep it Fair: A Proposal to Streamline and Improve Income-Driven Repayment for Federal Student Loans recommends drawing on the best features of the five current IDR plans to create one improved plan that’s fair and well-targeted, caps monthly payments at 10% of income, and provides tax-free loan forgiveness after 20 years of payments.

Read the report and press release
For more information about income-driven repayment, visit our IDR Resources Page

Lowest Income Students Face Highest Cost Burdens at 2- and 4-Year Public Colleges in All 50 States

A sobering new analysis from TICAS finds striking inequities in public college affordability, both within and across states. College Costs in Context: A State-by-State Look at College (Un)Affordability analyzes affordability at 2- and 4-year public colleges. It focuses on the share of family income required to cover the net price paid by students at each income level. While college costs are high relative to family incomes for most students in most states, the lowest income students face the most extreme and unrealistic financial expectations. For families that earn $30,000 or less, the share of total income required to cover their average net price is 77% at 4-year schools and 50% at community colleges—more than double the burden placed on any other income group.

Read the analysis
Download the data (sortable by state and sector), press release, and additional graphics

Congress Sends Mixed Message on Pell Grants

Last Thursday, Congress passed a bipartisan bill that funds the federal government through September 2017 but sends a mixed message on college affordability. On the one hand, the bill includes the restoration of year-round access to Pell Grants, which will help nearly one million students afford additional courses to help them graduate more quickly. On the other hand, the deal raids $1.3 billion in Pell Grant funds to pay for other, unrelated programs.

While the agreement preserves an already scheduled, inflation-based increase in the maximum Pell Grant for the 2017-18 school year (up $105 to $5,920), this award level will still cover the smallest share of the cost of attending a 4-year public college in over 40 years (less than 30%). The annual inflation adjustment expires after this year, so unless Congress takes action in the coming year to extend it, the maximum grant will flatline, and its purchasing power will likely decline even more. As the Administration and Congress begin their budget process for the next year, TICAS and our coalition partners will fight against expected attempts to weaken Pell Grants or raid Pell Grant funding, and we’ll keep urging Congress to use Pell Grant funds only to secure and strengthen this critical investment in college affordability.

Read our statement and coverage in the Washington Post

IRS Data Retrieval Tool Outage Complicates Financial Aid Applications and Student Loan Repayment for Millions, Back Online for Borrowers Soon

In March, the U.S. Department of Education announced the IRS Data Retrieval Tool (DRT) would be offline until the fall to address security concerns.  The DRT lets students and borrowers easily transfer their tax information into the online FAFSA and application for IDR plans. Without it, millions of aid applicants and student borrowers will have a harder time getting needed aid or keeping their loan payments manageable.

Through blog posts, coalition letters, and media interviews, we have urged the Department to better communicate with students and borrowers about the outage, help them navigate the new complexities, and restore DRT access as soon as possible. TICAS has led efforts to limit the harm to student loan borrowers as well as financial aid applicants, calling for user-friendly solutions to be implemented as quickly as possible.  The Department has now committed to having a more secure and still simple DRT online by the end of this month (May) for IDR purposes, although it won’t be available for the FAFSA until October.

Read our blog posts on the outage and options for borrowers and aid applicants

Issue Brief on College Risk Sharing

A New Approach to College Risk Sharing: Enhancing Accountability to Improve Student Outcomes provides an overview of the issue, identifies potential unintended consequences for policymakers to avoid, and outlines a proposal that combines both risk sharing and rewards to give colleges a clearer stake in their students’ success and ability to repay their debt. TICAS’ proposed accountability system applies to all colleges, and it gives colleges at all performance levels an incentive to improve. Outcomes range from financial and nonfinancial rewards to risk-reduction plans and graduated risk-sharing payments, based on how much risk the school poses to students and taxpayers.

Read the issue brief and press release

Thanks for Telling Congress to #DefendCFPB

Earlier this year we warned you that the federal Consumer Financial Protection Bureau’s independence and very existence face threats from the White House and Congress, and urged you to tell lawmakers why the CFPB matters to you. A big thanks to more than 900 of you who made your voice heard, joining 400,000 Americans nationwide who urged Congress to oppose efforts to weaken the CFPB! We’ll keep you informed as things unfold.