REMINDER: Take Action by Aug. 10 to Make Income-Driven Repayment Better!
Gainful Employment Rule Now in Effect
Important Wins for Low-Income Students in California’s 2015-16 Budget
Standing Up for Ripped-Off Students at Corinthian Colleges and Other Schools
Risk Sharing and Rewards for Colleges: Our Proposal for “Skin in the Game”
Other Recent Work from TICAS
We recently asked you to weigh in on the proposed new repayment plan for federal student loans: Revised Pay As You Earn (REPAYE). While better than existing plans in some key ways, REPAYE still needs improvement. A big thanks to the more than 1,000 of you who already took action! And if you haven't yet, NOW is the time to make your voice heard – the deadline is in less than 2 weeks.
The U.S. Department of Education is only accepting feedback on REPAYE until Monday, August 10, so click here to tell the Department 20 years of payments is long enough!
Despite five years of fierce opposition from the for-profit college industry, the federal gainful employment (GE) rule went into effect on July 1! Its purpose: to end federal funding for career education programs that consistently leave students with debt they can’t repay. TICAS has helped lead the coalition of more than 50 organizations —advocates for students, veterans, civil rights, consumers, and college access -- that’s fought for this common-sense regulation, which applies to programs at all types of schools. Thousands of you weighed in with policymakers when it mattered most, and your voices made a difference!
The for-profit college industry has tried everything to stop GE, and it’s still trying. When it sued the Education Department yet again, our coalition filed amicus briefs supporting GE, and federal judges upheld the whole current rule. Still, the industry plans to appeal while continuing to lobby for legislation to block GE in the House and Senate . Fortunately the Administration is firmly committed to GE: Education Secretary Duncan recently called it “the Administration’s signature effort to protect students and taxpayers.” Even though the rule isn’t as strong as we’d have liked, it’s stronger than the 2011 GE rule and has already prompted some schools to improve programs, lower prices, provide more career assistance, and/or eliminate bad programs.
We are VERY happy to report that the final 2015-16 California state budget will help make college more affordable for thousands of California’s low-income students. Most importantly, it increases the number of competitive Cal Grants – for students who don’t go to college right after high school – by nearly 15%. This is a key win for our diverse statewide coalition, Californians for College Affordability, which made nontraditional students’ access to Cal Grants its top priority this year. The competitive program current serves only 1 in 17 eligible applicants, and this is the first increase in its 15-year history. There’s still a long way to go before qualified students can count on this much-needed resource, but this is an important start. The budget also makes more grant aid available to help the lowest income full-time community college students cover non-tuition costs. In total, the budget increases available need-based aid by about $50 million next year and more than $70 million annually in future years. We thank the Legislature and Governor for recognizing the importance of investing in need-based aid and look forward to working with them to build on these important investments.
For more on the new changes, see our blog post.
TICAS has been actively seeking justice for students who were fraudulently lured into schools owned by Corinthian or other predatory colleges. When a debt collector with no experience running a college sought to buy more than 50 former Corinthian campuses, we and our coalition partners advocated for more relief and stronger protections for students. As a result of our efforts and those of the Consumer Financial Protection Bureau and state attorneys general, the final terms of the sale provide $480 million in private loan debt relief for Corinthian students and apply the gainful employment rule to all the schools’ programs, as well as other wins. We also keep pushing for federal loan discharges for Corinthian students, and the Education Department has started taking steps towards helping federal loan borrowers who got ripped off by their school. We continue to monitor the situation to make sure students actually get the debt relief they’re entitled to under law, and to push for more changes to better protect students and taxpayers.
TICAS is a leading advocate for colleges to have more of a stake in their students’ success, debt, and ability to repay, and the concept of college risk sharing continues to gain support across party lines. This spring we issued a detailed risk-sharing proposal, which ties college eligibility for federal aid more closely to the level of risk each institution poses to students and taxpayers, and provides rewards for colleges where risks are low. To assess risk, we use a measure we created called the Student Default Risk Indicator (SDRI).
Here are a just a few more of the many things we’ve been up to over the last couple of months. To see all our blog posts, press releases, and publications, go to TICAS.org. And to keep up with us between email updates, please follow us on Twitter.
- Weighing in on “free”: tuition free and debt free are not the same thing. Our latest blog post has new data showing that lower income students who go to public college “tuition free” are more likely to borrow than higher income students who pay for some or all of their tuition bill. This drives home the importance of covering low-income students’ non-tuition costs, including at community colleges, for any plan to reduce student debt or make college debt free.
- Pushing back against Pell Grant funding cuts. Both the House and Senate education funding bills would cut Pell Grant funding by hundreds of millions of dollars and also repeal the gainful employment regulation (discussed above). We strongly criticized these harmful provisions in our statements on the House and Senate bills, and the White House has threatened to veto both bills.
- Explaining changing interest rates. With rates for new federal student loans changing on July 1, in June we issued a new easy-to-read chart, with 2015-16 interest rates, loan amounts, and other useful information. Our press release pointed out that while rates are lower this year, the Congressional Budget Office projects much higher rates next year, and it’s time for Congress to revisit the overall design of the student loan program. Our take on rates was featured in the New York Times and the Nightly Business Report on PBS (begins at 19:29).