Blog Post | November 1, 2019

What’s in the House College Affordability Act

Author: Michele Streeter

On October 31, the House Committee on Education and Labor passed the College Affordability Act (CAA), a comprehensive proposal to reauthorize the Higher Education Act.

Below, we outline major provisions in the CAA that TICAS has recommended and that would significantly improve college affordability and better protect students and taxpayers from predatory practices and colleges.

We also outline areas where we would like to see improvements.

TICAS Priority AreaWhat’s In the College Affordability Act
Pell Grants

  • Increases the maximum Pell Grant award by $625

  • Permanently restores the Pell Grant’s former automatic annual inflation adjustment

  • Restores Pell Grant eligibility for students defrauded by their institution

  • Expands Pell Grant eligibility to DACA & TPS beneficiaries

  • Restores Pell Grant eligibility for students who are incarcerated

Federal Student Loan Program

  • Repeals student loan origination fees

  • Streamlines existing income-driven repayment (IDR) plans into a single, improved plan, paired with the option of a fixed repayment plan

  • Allows all borrowers to access IDR

  • Caps monthly IDR payments at 10 percent of discretionary income

  • Provides debt forgiveness after 20 years of payments in IDR

  • Includes a provision to allow borrowers to be automatically re-enrolled in an IDR plan without having to proactively submit new income information every year

  • Includes a provision to automatically enroll delinquent borrowers in IDR to avoid default

  • Better targets debt forgiveness to those who need it most by removing the monthly standard payment cap and phasing out the income exclusion for high-income borrowers enrolled in IDR

  • Removes default records from the credit history of federal student loan borrowers who have consolidated their defaulted loan or repaid their loan in full

  • Includes a cap on collection fees that can be charged to borrowers in default

  • Includes a directive to the Comptroller General to conduct a study on the impact of the counterproductive practice of states suspending licenses due to student loan default

Institutional Accountability

  • Reinstates the gainful employment rule to better protect students from high-cost low quality programs

  • Establishes a fair process for borrowers to discharge their loans based on college misconduct (borrower defense to repayment)

  • Closes the 90/10 loophole that incentivizes predatory recruiting of veterans and strengthens the rule by restoring the requirement that schools receive at least 15 percent of revenues from sources other than taxpayers

  • Takes steps to improve the cohort default rate (CDR) by incorporating the percentage of students who borrow

  • Restores the ability of students whose schools close precipitously to receive automatic loan discharges and reduces the period for automatic discharge for students who do not re-enroll from three to two years

  • Ensures wrongdoing by schools is not kept secret and protects students’ ability to go to court by eliminating mandatory arbitration agreements and class action waivers

  • Creates a secret shopper program to improve enforcement and deter college violations of the ban on incentive compensation and on misrepresentations to students

  • Creates an FSA Enforcement Unit and increases the penalties for college misrepresentations to students

  • Clarifies the requirements that schools must meet to convert from for-profit to non-profit or public status and requires that converting schools continue to comply with sector-specific regulations for a period of time

  • Creates a new metric to track the shares of a school’s borrowers making on-time payments and gives the Education Secretary the authority to establish thresholds impacting Title IV eligibility

Federal-State Partnership

  • Includes significant new investments in a federal-state funding partnership, providing grants to states that agree to waive community college tuition and fees on a first-dollar basis

  • Targets significant new investments to community colleges and minority-serving institutions

  • Includes student success fund to support the adoption and expansion of evidence-based reforms and practices

Data & Information

  • Repeals the student unit record ban

  • Creates a private, secure student level data network

  • Requires the federal government to collect private student loan data directly from lenders

  • Takes steps to improve financial aid offer communications to students

  • Improves the design and accessibility of colleges’ net price calculators

  • Improves federal student loan counseling

Federal Financial Aid Application

  • Simplifies the FAFSA, especially for the lowest income students

  • Requires an annual report on the impact of FAFSA verification

  • Removes the FAFSA question regarding felony drug convictions

  • Increases the income protection allowance for all students

There are additional key provisions that TICAS believes are critical to include in any effort to reform our nation’s higher education system that were not sufficiently addressed in the CAA, including:

  • Making the Pell Grant a fully mandatory program and explicitly committing to a path to doubling the current maximum award;
  • Including in a federal-state partnership additional provisions to invest in both direct aid to students and operating supports for all public colleges, a mechanism to automatically shore up state spending during economic downturns, and a requirement that states collect and report data to address racial and socioeconomic equity gaps in college access and degree attainment;
  • Requiring school certification of private student loans;
  • Making further improvements to financial aid offer communications;
  • Ensuring debt forgiven in IDR is not subject to taxation;
  • Fully automating federal student loan discharge for totally and permanently disabled borrowers rather than requiring those borrowers to proactively apply for discharge;
  • Including a mechanism to more successfully facilitate data sharing between the Education Department and the IRS to facilitate automatic IDR enrollment and re-enrollment;
  • More effectively restraining interest accumulation for borrowers while they are enrolled in IDR;
  • Including additional provisions to ensure borrowers successfully transition into the new repayment system so that the Education Department can wind down existing repayment plans; and
  • Ensuring that actions to address abuse of forbearance options undermining the meaningfulness of the CDR also protect the metric’s ability to transparently measure and track default.