WASHINGTON, D.C. – Today, U.S. Representative Bobby Scott (Va.–03), Ranking Member of the Education and the Workforce Committee, introduced the Aim Higher Act, a bill to make higher education institutions—particularly for-profit colleges—more accountable and transparent to the public. The legislation also includes resources to boost college financial aid support programs for low-income students and improves the current loan repayment system. Across the country, 44 million consumers share the still-growing burden of $1.5 trillion in student loan debt.
Center for Responsible Lending Counsel Ashley Harrington released the following statement:
For too long, for-profit colleges have failed to serve the educational purpose for which they were intended. The combination of high-costs and low graduation rates by these bad actors have resulted in unfair burdens for student borrowers and taxpayers. This bill improves accountability for all higher education institutions and creates a sensible path to fix our broken student loan repayment system.
The bill also recognizes the important role of states in ensuring higher education quality and accountability. Acknowledging that states are well-equipped to monitor and regulate institutions, the proposal shifts some responsibilities currently held by accreditors to their purview. Given recent efforts to unlawfully thwart state authority to hold institutions and servicers accountable, CRL applauds this effort to increase, rather than decrease, the states’ role in higher education.
While much remains to be done to address the burgeoning student debt crisis, this bill would go a long way towards ensuring meaningful access for all students to receive high quality, higher education options. It represents an important and comprehensive path forward for current borrowers, future students, the nation’s long-term economic competitive posture, and taxpayers who make it possible.
Specifically, the Aim Higher Act includes the following critical provisions:
- Reduces allowable ratios governing federal aid distributions to for-profit institutions from 90/10 to 85/15;
- Prohibits the use of federal funding on marketing and recruitment efforts by institutions that spend less than half of their tuition revenue on instruction; and
- Bans the practice of forcing students to sign pre-dispute arbitration/class action ban agreements that currently deny harmed borrows from having their own day in court.
- Simplifies the loan repayment system to include one standard plan, and one income-based plan that is accessible to all borrowers, and creating a system for automatic enrollment;
- Eliminates costly and unnecessary origination fees for federal loans;
- Allows for increased data and transparency, including student-level data; and
- Increases support for minority-serving institutions and others whose enrollment includes a large proportion of low-income students.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Charlene Crowell at email@example.com.