Biden Administration Extends Student Loan Payment Pause and Provides Critical “Fresh Start” for Millions of Borrowers
This month, President Biden extended the student loan repayment pause moratorium and announced a critical “fresh start” for millions of borrowers who were in delinquency or default on their student debt when the pandemic began. Borrowers who had been in delinquency or default as of March 2020 will be reentered to repayment in good standing and will not be subject to the financially devastating effects of default, including having their wages, tax credits, and other benefits seized.
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Read more in Diverse Issues in Higher Education
Reforming Income-Driven Repayment Can Reduce the Burden of Student Debt
Despite the availability of and significant improvements to income-driven repayment (IDR) plans, far too many borrowers struggle to repay their federal student loan debts. For IDR to better protect borrowers from unaffordable payments, keep borrowers out of default, and provide a reliable light at the end of the tunnel, policymakers must make significant reforms to IDR design and implementation.
We also welcome the Biden Administration’s recently announced actions to recognize the effects of forbearance steering and flawed payment tracking on borrowers enrolled in income-driven repayment (IDR). The actions announced will result in immediate balance cancellation for tens of thousands of borrowers under IDR and Public Service Loan Forgiveness and move millions of borrowers closer to the end of their repayment term where any remaining balances will be discharged. We also applaud the Education Department’s actions to end harmful servicing practices and conduct stronger oversight of federal loan servicers.
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Read more in the Los Angeles Times
Even After Legislative Intervention, Many California Students Continue to Enroll in Remedial Coursework
Years of research have highlighted the toll of traditional remedial coursework on students’ academic trajectories and odds of completing; however, little attention has been paid to the added financial costs students also incur due to taking remedial courses.
TICAS collected data from five community colleges in California to shed light on the role remedial courses played in the total units completed by financial aid recipients who successfully completed their associate degree or transferred. The Detrimental Costs of Remedial Education for California Community College Students – illustrates the added financial costs of remedial education even for those students who beat the odds and ultimately achieve their educational goals.
Leveraging State and Local Relief Funds to Increase College Completion Rates
States are in the process of determining how to use the $350 billion in federal relief funds granted last year, which must be allocated by 2024 and spent by 2026, and some states are using it to tackle the urgent problem of the college completion crisis. While high school graduation rates have soared to historic highs over the last two decades, growth in the college graduation rate has been much more tepid, and large racial gaps persist.
A webinar co-hosted by TICAS, SHEEO, and Results for America highlighted states and localities that are investing in proven programs aimed at increasing college persistence, graduation, and lifetime earnings and offering a roadmap for others that are in the midst of deciding how to spend relief funds.
Watch the webinar
Read more in University Business
Funding the Future: How Michigan’s Financial Aid Investments Stack Up in the Midwest
Despite a larger than average student population, Michigan spends less in total need-based financial aid than all other states in the Midwest. By investing in state relief funds, Michigan could rise to the top. See how Michigan’s financial aid investments stack up in a fact sheet.
2021-22 Negotiated Rulemaking for Higher Education Comes to an End
Last month, negotiators serving on the Institutional and Programmatic Eligibility Committee convened for the third and final week-long work period as part of the U.S. Department of Education’s negotiated rulemaking process. Committee members continued discussions on revised accountability regulations including the gainful employment rule, closing the 90/10 loophole, and strengthening financial responsibility and administrative capability for higher ed institutions. Consensus was reached for two out of seven issues: ability to benefit and closing the 90/10 loophole.
Read our recap of the final negreg work period
TICAS In the News
- Opinion: Analysis: How States Can Use Federal Relief Funds to Raise Graduation Rates | Sameer Gadkaree (TICAS) and Michele Jolin (Results for America), The 74 Million
“While last year’s federal legislation provides one-time funding, if states invest the money well, it will benefit both residents and the states’ budgets for many years to come. Evidence-based comprehensive student success programs cost money upfront but generate money over time — for colleges, through increased tuition and grant aid from students remaining enrolled, and for communities, through increased tax revenue and economic gains.” - Deferral of Accountability Metrics: Unintended Consequences of the Student Loan Payment Pause | Hugh T. Ferguson, National Association of Student Financial Aid Administrators
“It remains an imperative metric to have as a part of our accountability structure because the loan default continues to be the absolute worst outcome for any student who borrows to attend college,” said Jessica Thompson, vice president at The Institute for College Access & Success (TICAS). “The financially devastating consequences of default are significant and can have repercussions for students’ financial lives in their ability to get out of it for so many years to come.” - Student loan repayment deadlines move back, but moving targets frustrate some borrowers | Eileen McClory, Dayton Daily News
“Michele Streeter, associate director of policy and advocacy at the Institute for College Access and Success, a national nonprofit focused on college affordability and access, noted that a major part of the extension would allow borrowers in default a ‘fresh start’ and reenter repayment in good standing. Streeter said many of the people who are in default went to for-profit institutions who didn’t serve students well.” - Gainful employment proposal looks at college vs. high school grads’ earnings | Natalie Schwartz, Higher Ed Dive
“Kyle Southern, an associate vice president at The Institute for College Access & Success, said one of the organization’s top priorities is reinstating the gainful employment rule. While TICAS is open to a more rigorous measure, the organization wants to assess data on how the change will impact students. Still, Southern said that racial economic equity is at the center of the gainful employment rule.”
