The Latest Student Loan News: What Borrowers Need to Know
Will the current student loan payment pause be extended past August 31? How will the new federal student loan interest rates affect current and new plans? Who qualifies for loan forgiveness programs? What does a ‘fresh start’ mean after being in default? All these questions and more are addressed in TICAS’ latest student loan blog.
July 1 Brings Higher Interest Rates on New Federal Student Loans
On July 1, most changes to federal student aid – both loans and grants – went into effect. For the year starting July 1, 2022, the maximum Pell Grant will be higher, and new federal loans for undergraduates, graduate students, and parents will have higher fixed interest rates than loans taken out the year before. To help inform college borrowing decisions, we have a new, easy-to-read chart with 2022-23 interest rates, loan amounts, and other useful information for the most common types of federal loans.
Department of Education Issues Large Group Relief for Defrauded Borrowers
Last month, the Biden-Harris Administration took action to cancel outstanding debt for more than 500,000 borrowers who were victims of fraud by the now defunct Corinthian Colleges. In another win for students, the U.S. Department of Education reached a settlement to provide debt relief to an additional 200,000+ defrauded borrowers in Sweet v. Cardona.
California Governor Gavin Newsom and State Legislature Reach Final 2022-23 State Budget Agreement
Coming off a historic budget season with a total of just over $300 billion committed to support Californians statewide, the 2022-23 fiscal year is officially here. Of all the important issues facing California Governor Gavin Newsom and the Legislature, we are grateful that the state’s leaders continues to prioritize postsecondary investments that center student access and success, increasing affordability, building out a first-class educational data system, and strengthening consumer protections.
Alongside our diverse coalition united in strengthening state need-based financial aid, we applaud Governor Newsom and the Legislature for embracing the Cal Grant Reform Act, although without implementation funding at this time, and for including key higher education investments in California Community College student success, critical data infrastructure, and funds for critical government entities that provide consumer protection.
Michigan Legislature Passes Budget with Over $2 Billion Investments in Higher Education
Earlier this month, the Michigan Legislature passed a budget that will invest over $2 billion in higher education for Michiganders. We applaud this investment’s growth from last year’s $1.8 billion, demonstrating a growing commitment to improving higher education access and affordability, and look forward to continuing conversations about how to invest the additional $7 Billion that remains unspent.
Happy Birthday, #PELL!
June 23, 2022 marked the 50th year anniversary of the Pell Grant program, the federal government’s most effective investment in college affordability. To commemorate Pell’s impact and success, students, higher education advocates, and lawmakers gathered on Capitol Hill for a briefing co-hosted by TICAS, and honorary co-host Senator Patty Murray (D-WA).
Gainful Employment: Using Data to Examine Potential Effects of a High School Earnings Threshold
During the Department of Education’s February work period of its negotiated rulemaking (neg reg) process, it was proposed that to be eligible for federal aid, Gainful Employment (GE) programs should have to clear both a debt-to-earnings ratio threshold as well as demonstrate that completers could earn more than early-career high school graduates in their fields.
TICAS used available data to model how the proposed high-school earnings threshold metric would potentially affect GE programs and reveals which institutions would operate the largest share of failing GE programs if it were to be adopted.
Lessons Learned on Student Retention and Completion During the Pandemic
Nationwide, students from underserved communities have faced disproportionate challenges to college enrollment and completion. These challenges were further exacerbated at the onset of a global pandemic and economic downturn. TICAS, in partnership with MDRC and LEO learned and compiled key lessons from evidence-based college completion programs on how they adapted to the changing seas for the past two years and continued to improve students’ completion rates.
TICAS In the News
- Think Twice Before Taking Out a Private Student Loan | Ann Carrns, The New York Times
“Buyer beware,” said Michele Streeter, associate director of policy and advocacy with the Institute for College Access and Success. Some data suggest that many students who take out private loans haven’t maxed out their federal loans, suggesting they may not be aware of the differences between the loan types, Ms. Streeter said.
- Who’s missing from California’s community colleges? | CalMatters
Some of the enrollment declines can be attributed to demographic trends such as birth rates falling, says Jessica Thompson, vice president of The Institute for College Access and Success, a national organization. But the pandemic, she says, also has exacerbated a lot of pre-existing gaps in who is able to access college and who cannot.
- Gainful Employment Change Could Harm For-Profits | Meghan Brinnk, Inside Higher Ed
“The basic economics of a college education, even if a student does not complete it, is supposed to be associated with higher earnings than if that student had not attended college at all,” said Marshall Anthony Jr., research director at TICAS. “Failing GE programs, especially the disproportionately substantial share of failing GE programs at for-profits, are in fact not ensuring students an adequate return on their education.”
- ED Propose Improvements to Student Debt Relief Programs | Rebecca Kelliher, Diverse Issues in Higher Education
“The Department’s borrower defense proposal would bring dramatic improvement and help realize the intent of the law,” wrote Kyle Southern, associate vice president of The Institute for College Access & Success (TICAS)… ED’s proposals further included expanding eligibility for Total and Permanent Disability (TPD) discharge. Michele Streeter, associate director of policy and advocacy at TICAS, noted that recent data points to more than 500,000 borrowers who qualify for student debt discharge via TPD yet have not received loan cancellation.