President’s FY2017 Budget Addresses Student Debt, College Affordability and Completion

The budget also streamlines the five existing IDR plans into one similar to the REPAYE plan. We strongly support the goal of simplifying income-driven repayment options, which has bipartisan support. While the proposed plan is a strong starting point, it should still be improved upon before becoming the only IDR plan, including by limiting payments to 20 years for all borrowers as we and thousands of others have urged. A maximum 20-year repayment period would help all borrowers focus sooner on other important priorities, like saving for their retirement and for their children’s education.

State Investment: The President’s America’s College Promise plan encourages states to invest in higher education, which is critical to improving college affordability and completion. It supports states that maintain higher education funding, and make certain reforms such as making community college tuition free so that Pell Grants can help students cover other college costs and stay in school. Unlike many state and local free-tuition plans, the president’s plan recognizes that non-tuition costs are the biggest affordability challenge for students of limited means, with tuition accounting for just one-fifth of the cost of attending a community college.

College Accountability: The budget also takes additional steps to encourage colleges to get more students to graduation with meaningful credentials and manageable debt. It rewards colleges that successfully enroll and graduate students from all backgrounds through the College Opportunity and Graduation Bonus Program. In addition, it restores the 85-15 Rule and closes a loophole that has led unscrupulous for-profit colleges to aggressively and deceptively recruit veterans and service members into high-priced, low-quality programs. These reforms to the current 90-10 Rule have bipartisan support and have long been called for by TICAS and consumer and veterans advocates.

We also urge the Obama administration to strongly enforce existing laws and regulations to protect students and taxpayers from predatory and financially unstable colleges, including through the Department of Education’s newly established enforcement unit. Congress should also invest in strengthening the department’s enforcement capacity, which will more than pay for itself by reducing waste, fraud, and abuse.

Simplification: To improve access to resources that can help students and their families cover college costs, the budget takes significant steps to further simplify the federal student aid application process, and to streamline and better target federal education tax benefits. Many of these approaches to simplification reflect our longstanding recommendations and have bipartisan support.