Elections Cast Spotlight on Student Loan Repayment

DC Shuttle …

Momentum for Easing Student Loan Repayment. Both parties are looking to appeal to young voters this fall and student loan repayment has gained support as a result. Rep. Luke Messer, chair of the House Republican Policy Committee, plans to push for student loan tax breaks, such as a proposal (H.R. 5415) by Rep. Elise Stefanik (R-N.Y.) to exclude from a worker’s income up to $10,000 annually in student loan payments made by his or her employer. Rep. Robert Dold (R-IL) has been promoting a similar proposal (H.R. 5191) to provide workers a tax exclusion for up to $5,250 in education assistance paid for by an employer, such as contributions toward an employee’s student loan or contributions to a 529 education savings plan. The Dold bill also would give employers a 50% tax credit for such payments on behalf of workers.

Native American School Choice Bill Advances. The Senate Indian Affairs Committee advanced a bill that would create a pilot program to provide federal funds to state-run education savings account programs that Native American families could use to pay for alternative education options. The measure (S. 2711) would direct the Interior Department to create a grant program that would provide money to state-funded savings account programs in selected states if the funds are available. The initial bill would have required the department to reimburse states that provide grants to education savings accounts, or voucher programs, that eligible parents could apply toward the cost of private or charter schools. The committee approved the bill by a 7 to 6 vote along party lines. The money for the grant program would come from amounts already authorized and allocated to schools funded through the Bureau of Indian Education (BIE), the federal agency that operates 54 schools on Indian lands and supports and oversees another 129 schools operated by individual Indian tribes. Sen. John McCain (R-AZ) introduced the bill in March and said the measure would provide more options to Indian parents. Opponents of the bill said it would siphon funds away from the BIE, which already has a long backlog of facility maintenance. At a legislative hearing in April, Assistant Secretary of the Interior for Indian Affairs Larry Roberts testified in opposition to the bill, saying that it would “result in further financial strain on the BIE system.”

Department of Education Continues Reworking Rule on Title I Funding. The U.S. Department of Education released a change to how it would monitor states’ spending of Title I dollars, amid criticism of its “supplement not supplant” rule. Republican lawmakers continue to oppose a proposed Education Department rule on school funding, despite changes intended to give school districts more flexibility. Senate Health, Education, Labor and Pensions Chair Lamar Alexander (R-TN) said the Education Department should not be creating the formulas. Alexander said the rule goes against the law, which prohibits the education secretary from prescribing any specific methodology that local and state school districts use to distribute state and local funds. The rule deals with federal Title I funding under the Elementary and Secondary Education Act, which targets low-income schools and is meant to supplement state and local funds to help at-risk students succeed. The Education Department says some districts have used federal funding to replace state and local dollars in their Title I schools. Under the department’s previous draft of the proposed rule, districts would need to show per-pupil spending at Title I schools to be equal to or greater than the average amount spent per pupil at non-Title I schools. The revised rule gives districts four options in methodologies and formulas they can adopt to show how they are in compliance. Read more in Education Week.

ITT Closes. ITT Technical Institutes closed, shuttering all its campuses, on Aug. 29. The announcement followed action by the Education Department blocking ITT from enrolling new students for federal financial aid. The department has given ITT many warnings, and multiple lawsuits are pending against the company, but the sudden closure surprised students who were forced to search for new options. ITT said their hand was forced by the Department of Education, which encouraged local schools to help ease the shock by admitting former ITT students. While students were left with no school and no degree, many loans may be covered with taxpayer dollars. The closing comes less than three months after the Education Department announced students could have their federal loans forgiven if they prove their college defrauded them.

We publish the DC Shuttle each week featuring higher ed news from Washington collected by the New England Council, of which NEBHE is a member. This edition is drawn from the Higher Education Update in the Council’s Weekly Washington Report of Sept. 12, 2016. For more information, please visit: www.newenglandcouncil.com.



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