Chair of the House Education Committee Virginia Foxx (R-N.C.) introduced a bill Thursday that aims to lower the cost of college and reform the student loans process.
The College Cost and Reduction Act has three goals: to make the cost of college more clear and personalized to a student, to force colleges that give out degrees that do not produce good returns on investment to become financially responsible for it, and to shift funding for universities based on their student outcomes.
“Democrats and Republicans agree that student loan debt in America has reached astronomical levels — the pursuits of students in postsecondary education have been undercut as a direct result. Without question, the root cause of this problem is the inflated cost of obtaining a college degree, and there’s considerable room for reforms,” Foxx said.
“The College Cost Reduction Act is the vehicle through which much-needed accountability, transparency, and affordability measures can be both realized and implemented to the benefit of students and their families,” she added.
The bill would amend the Higher Education Act (HEA) and have the Education secretary and other heads of federal agencies working with representatives in the industry to create standard financial aid offer forms for schools to follow. The forms would outline all the costs of attending the school, what the students themselves would have to pay and what type of financial aid they are receiving.
The bill would also make it so the Education secretary has to maintain the College Scorecard website so parents and students can easily gather key information about the university to which they are looking to apply.
The legislation would create two new programs: the “Pell Plus” program and the “PROMISE” grant program.
The Pell Plus program would allow students in certain degrees to get greater Pell Grants to pay for school. The PROMISE program bases funding for schools on student performance, graduation rates and low tuition. These programs are only eligible to colleges that give prospective students the maximum price it would cost to obtain a degree before they enroll and not change it.
Schools would also become financially responsible for unpaid loans and must compensate the government yearly for a portion of unpaid interest and loans from students they previously had under this bill.
Lastly, it makes changes to student loans, putting an aggregate student loan limit of $50,000 on undergraduate students and $100,000 for graduate students. For paying back student loans, it would create only two plans, one an income-driven repayment plan and the other a 10-year “mortgage style” plan.
This legislation is part of a series of bills the House has introduced to reform HEA, along with tackling college costs and student loan debt.