The House just released a new piece of legislation, known as the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act. The name’s ironic, because it’s definitely not going to help us PROSPER.
The bill would impact higher education in serious ways. Among the most prominent: 1) reduction of federal aid programs, including the Public Service Loan Forgiveness program, 2) deregulating of for-profit schools, 3) reducing student loan repayment plans, 4) making student loans more expensive.
- More than 500,000 people have built their lives around the Public Service Loan Program (PSLF), which promised loan forgiveness for borrowers who chose to work in public service or non-profit sectors. The PROSPER act would eliminate PSLF completely, rescinding one of the only lifelines that student loan borrowers have been offered.
- The PROSPER act seriously benefits for-profit schools. The bill would eliminate the “90/10 Rule,” which says for-profit colleges can’t receive more than 90% of their income from federal aid, as well as the Gainful Employment Rule, which makes sure colleges are providing quality education before offering them federal aid. In short: for-profits would be subject to less accountability.
- Right now, we’ve got 6 different student loan repayment plan options, 4 of which offer income-driven repayment opportunities. The PROSPER act would consolidate those into 2 options, which are less sensitive to borrowers’ respective incomes and would likely result in higher payments for both low- and high-income borrowers.
- The PROSPER act eliminates more affordable Perkins Loans, which are federal student loans for low-income undergraduate and graduate students. Perkins Loans have lower interest rates than other federal loans, and eliminating them makes the costs of student loans potentially more expensive.
Tell your reps not support the PROSPER act. We need higher education reform that helps students, not for-profit schools.
The PROSPER act would reduce federal aid programs, decrease accountability for for-profit schools, and diminish student loan repayment options for borrowers, and potentially increase the cost of taking out loans. It would make the student debt and higher education affordability crisis worse.