While Still Paying Off Student Loans, Sen. Murphy Tackles College Affordability

By Kelsey Hopper
BU Washington News Service

WASHINGTON—Perhaps because he is still paying off student loans himself, Sen. Chris Murphy, D-Conn., is keenly aware of the nation’s accumulated student loan debt – which, he noted recently, has reached $1.1 trillion.

“Onus [should] be on colleges to lower costs, not students to cough up more cash,” Murphy declared in a Twitter message last month, just days before he and Sen. Brian Schatz, D-Hawaii, unveiled legislation designed to stem the growth of this mountain of debts.

Their legislation, to be formally introduced this month, comes as Congress proceeds slowly to consider reauthorization of the Higher Education Opportunity Act of 2008, the law governing federal higher education programs that officially expires at the end of this year.

Average loan debt for college graduates nationwide exceeded $29,000 in 2012, according to a report released this month by the Institute for College Access and Success, a nonprofit research group based in Oakland, Calif. The report, which takes into account data from graduates of public and private nonprofit four year colleges, also indicates seven in 10 college seniors who graduated in 2012 had student loan debt.

Murphy and Schatz are hoping their proposal will prompt a discussion within the reauthorization of the higher education act of new ideas to make post-secondary education more accessible as well as affordable. Their initiative comes as public colleges and universities in New England experienced a 42 percent increase in tuition and fees over the past decade, according to the College Board. For two-year colleges, the comparable increase was 25 percent.

“I’ve heard from students and educators all across Connecticut and the message is clear: We need college administrators to wake up every day thinking about how they’re going to bring down the cost of college for students,” Murphy, a member of the Senate Health, Education, Labor and Pensions – HELP — Committee, said in a statement. “Our legislation will incentivize schools to create new, innovative programs to bring down the cost of college while improving the quality of a degree, and will set new standards for schools that receive federal funding so that they’re more accountable to students and the taxpayer.”

Under the new legislation, colleges and universities would have two years to reform and meet the new minimum standards that would be created with the help of a commission of students, education experts, and stakeholders.

However, the legislation, entitled, The Affordable College Costs Empower Student Success, or ACCESS, Act of 2013, is — by Murphy’s admission – aimed at trying to ensure that future students will not be saddled with an unsustainable amount of debt, as opposed to tackling the current burden of debt.

When it comes to the latter, Murphy has plenty of company in the Nutmeg State.

For the 2012-2013 academic year, Connecticut residents who were undergraduates borrowed a total of just above $500 million in federal direct student loans, according to Constance Fraser of the state’s Office of Higher Education. Connecticut residents who were graduate students borrowed approximately $195 million in such loans.

These figures correlate to about 20,000 Connecticut undergraduates and 2,000 graduate students attending school both inside and outside the state.

“Student loans matter in Connecticut more than other states because all the other costs families have to incur are bigger,” Murphy declared during a recent Senate hearing. “We today have a generation of young families that are absolutely drowning in college debt, and I’m frankly representative of that cohort paying for past college and desperately saving for future college.”

The Institute for College Access and Success study also reported the percentage of graduating seniors with loans nationwide increased from 68 percent in 2008 to 71 percent in 2012. For Class of 2012 graduates in Connecticut, 61 percent graduated with debt and on average the debt of loans totaled roughly $28,000, the report said.

So far, hearings on reauthorizing the higher education legislation in the House and Senate have focused on simplifying the federal financial aid system, with a goal of making college costs more transparent and manageable for students and their families.

While the committees are still in the hearing stage of the reauthorization, one target of the simplification discussion is the Free Application for Federal Student Aid, or FAFSA, which is required of all students seeking Pell Grants to assist in paying for higher education.

Today, about 9 million students receive Pell Grants across the country, in addition to the more than 10 million students receiving federal loans.

The Pell Grant program is the main vehicle for helping low-income students afford college costs. Most Pell Grant recipients qualify for the maximum award, which is adjusted annually for inflation and stands at $5,645 for the 2013-14 academic year.

For the 2013-14 award year, the maximum grant will cover approximately 36 percent of the cost of attendance at a four-year public institution, down by half from 72 percent in the first full award year, 1976-77, of the Pell Grant program, when the maximum award was $1,400 and 1.94 million students were served. Cost of attendance includes tuition and fees, room and board, and allowances for books, supplies, transportation and other personal expenses.

In Connecticut, the most recent available Pell Grant figures – for the 2011-12 academic year — indicate about 8,250 residents received Pell Grants, totaling to approximately $259 million. The maximum Pell Grant award for the 2011-12 award year was $5,550.

For the academic year 2012-13, Connecticut residents filed a total of approximately 225,000 FAFSA forms.  The FAFSA form currently is 10 pages in length and is not for a single federal aid program, but rather for consideration for several federal student aid programs and state aid programs.

In a hearing last month on the higher education act reauthorization held by the Senate HELP Committee, discussion among the committee members and panelists — including leading academic experts and higher education lobbyists — agreed the FAFSA form needs to be re-evaluated, along with the overall process for obtaining federal student aid.

Recommendations to provide straightforward, low-to-moderate cost guidance and support services for high school students and their families were also included in the testimony of all the panelists.

“As we tackle reauthorization, I look forward to discussing ways we can promote early, early, awareness of our financial aid programs so that students know what is available to them before the graduate from high school,” said Senate HELP Committee Chairman Tom Harkin, D-Iowa.

To date, the Senate committee has held three of 12 scheduled hearings on higher education with one more slated this year and the remainder in early 2014 before it moves to mark up. In the House, the Education and the Workforce Committee has held 11 in a series of hearings entitled “Keeping College Within Reach,” and plans more hearings next year.

A recent House committee hearing focused on what happens to a student and his or her loan expenses once college is completed, and the current uncertainty about repayment options that students face.

The hearing’s panelists, comprised of non-profit organization directors, a lobbyist, and a research professor, supported the idea of a mandatory income based repayment – IBR — plan to facilitate paying back the loan. The panelists, along with many House committee members, agreed that automatically placing student loan borrowers into the existing income-based repayment program could make student loan debt more manageable, and allow students to work toward full repayment of the loans incurred.

“Those are all really good, smart reforms,” Rep. Joseph Courtney, D-Conn., said in an interview, referring to the income-based repayment plan. Courtney is a member of the Education and the Workforce Committee who helped negotiate the last higher education act reauthorization.

IBR was first made available in mid-2009 in an effort to link student loan repayments to income and family size. The U.S. Department of Education last month announced an initiative to inform student borrowers of repayment options such as IBR as a part of the Obama administration effort to improve college affordability.

Earlier this year, House Education and the Workforce Committee Chairman John Kline, R-Minn., signed a letter outlining the issues the committee is interested in examining. As with the Senate hearings and Murphy’s initiative, these included simplifying and improving student aid and loan programs; increasing college accessibility, affordability, and completion; encouraging institutions to reduce costs; and promoting innovation to improve access to and delivery of higher education.

The Higher Education Act, first authorized in 1965, was originally aimed at aiding middle- and low-income students. While the latest authorization expires at the end of this year (it took five years to accomplish that reauthorization), funding programs established or extended under the Higher Education Opportunity Act of 2008 will run through the end of the current fiscal year next Sept. 30.

So far, the hearings in both the Democratic-controlled Senate and Republican-controlled House have lacked the partisan acrimony that courses through so many current congressional debates.

Sen. Lamar Alexander of Tennessee, the senior Republican on the Senate HELP Committee – and a onetime president of the University of Tennessee – said during a recent hearing that he ”intends to work closely” with Harkin in “a bipartisan way to get a result” before the current Congress adjourns in late 2014.

Declared Alexander: “There is no ideological monopoly on the idea of making federal student aid, whatever the amount is, a friendlier process. That’s not a Democratic idea. It’s not a Republican idea. I think we all would like to do it.”


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