What's in the House Higher Education Bill

• Free community college – A major provision of the bill would provide free community college through a “federal-state partnership,” and is very similar to a proposal from then-President Barack Obama. In order to be eligible, states would need to reduce average public two-year tuition per student (beginning in the 2021-22 academic year) by at least 25%, and in return, the federal government would provide the additional 75% to reduce public two-year tuition to $0. Participating states would additionally gain access to a $500 million fund to support the adoption and expansion of evidence-based reforms and practices that improve outcomes for students. The bill would also enhance grant aid to low-income students who transfer from community college to a minority-serving institution to pursue a bachelor’s degree.
• Expanding need-based grant aid – The CAA would increase the maximum Pell Grant award by $500 and permanently index it to inflation, resulting in a total maximum award of $6,695 for fiscal year 2021 and $8,305 by FY2029, up from $6,195 today. Additionally, the bill would provide access to Pell for incarcerated individuals (who are currently subject to a ban) and would extend Pell eligibility to some short-term vocational programs. Notably, most short-term, for-profit programs would remain ineligible for Pell funding.
  • During markup, an amendment was passed that would boost the maximum Pell grant award by $625 instead of the $500 outlined in the original bill. The increase would push up the maximum award to $6,820 for FY2021, and subsequent automatic increases tied to inflation would lead to a maximum award of $8,460 in FY2029, according to BPC’s estimates.
• Streamlining student loan repayment – Under the legislation, loan repayment options for borrowers would be reduced to just one standard repayment plan and one income-driven repayment, or IDR, plan. Currently, borrowers face a complex system with eight total repayment choices. The new IDR plan would be more generous than the current offerings, as borrowers would be required to pay 10% of their earnings only at or above 250% of the poverty line, up from just 150% under today’s IDR options. Borrowers’ remaining debt would be forgiven after 20 years of repayment, as opposed to 25 or 30 years under today’s options. Additionally, the bill would make currently-ineligible Parent PLUS loans eligible for IDR.
• Simplifying the FAFSA – The bill would reduce the number of questions on the Free Application for Federal Student Aid by placing the applicant into one of three pathways based on the complexity of their finances. The vast majority of students who receive means-tested benefits would automatically receive the maximum Pell Grant and Pell recipients would only be required to complete the FAFSA once, upon initial enrollment in postsecondary education.
• Redefining institutional accountability – The CAA would codify into law and expand several Obama-era regulations that Secretary of Education Betsy DeVos has attempted to roll back. These include Gainful Employment, which cuts off federal aid eligibility at for-profit and career-training programs that exhibit high debt-to-earnings ratios among borrowers, and Borrower Defense to Repayment, which provides loan discharges for students who have been defrauded by their college. The bill would also create a new accountability regime under which institutions that spend disproportionately on marketing and recruitment relative to instruction would no longer be eligible to receive federal student aid dollars.
  • During markup, an amendment was passed that would automatically provide loan discharge to students affected by school closure. Currently, students are required to request discharge and it must be approved by the Department of Education.
• Updating data collection – The bill would lift the “student unit record” ban, allowing for the creation of a student-level data network. This would provide more granular data on a range of metrics, including student earnings, employment, transfers, and outcomes disaggregated by demographic characteristics. The bill would also require institutions to report spending on marketing, recruitment and lobbying, data which are currently not collected by the Department of Education.

This blog post was updated on October 31, 2019, to reflect amendments that were passed during committee mark-up. A prominent amendment submitted by Rep. Susan Davis (D-CA) included changes noted above, as well as provisions that would allow graduate students access to subsidized loans and expand the Public Service Loan Forgiveness program to part-time adjunct faculty, among other reforms. Additionally, the committee passed a bipartisan amendment that would improve the information provided to prospective students about college costs through reforms to the net price calculator.

Correction: A previous version of this blog post misstated the maximum Pell grant amount. It is $6,195, not $6,095.

This blog post was also updated on December 13, 2019, to reflect the Congressional Budget Office cost estimate for the bill of $332 billion over 10 years, $68 billion less than some initial estimates.