The College Cost Reduction Act (CCRA), a comprehensive legislative initiative intended to transform the financial landscape of higher education, was launched by Representative Virginia Foxx at the beginning of 2024.
The bill garnered a lot of attention despite failing to pass because of its comprehensive recommendations that addressed almost every facet of institutional responsibility, federal funding, and student lending.
Since the House Committee on Education and the Workforce wants to reduce $330 billion over the next ten years, many of the bill’s concepts are likely to be reinstated given the current political climate that favors education budget reduction.
A daring attempt to change Federal Aid and Student Loans
In order to reduce government spending on student loans and college programs, the CCRA aimed to amend the Higher Education Act of 1965.
The act contained more contentious elements that would further burden students and families financially, even if it also contained certain borrower-friendly provisions like removing origination fees and preventing interest from accumulating.
The termination of the Parent PLUS and Graduate PLUS loan programs, which presently permit borrowers to take out limitless amounts for higher education, would have been one of the most significant changes.
The CCRA instead suggested stringent lifetime and annual borrowing limitations.
For example, undergraduate loan limitations would reflect either the national median cost of college or the Department of Education’s maximum, whichever was lower, while graduate students would only be able to borrow amounts based on the average cost of their degree program.
The repayment was another significant upheaval
The conventional 10-year plan and a single income-driven plan would have been the only government repayment alternatives left under the measure, eliminating the current array of possibilities.
Repayment under the new IDR plan might be extended into a lifetime commitment since borrowers would pay according to a percentage of their income beyond a certain level, but forgiveness wouldn’t begin until they paid back what they would have under the regular plan.
The CCRA also brought about adjustments for Pell Grants
Grant amounts would be restricted to the median cost of all universities rather than being adjusted to a student’s actual cost of attendance.
This change may result in less funding for pupils who attend more costly schools or reside in affluent neighborhoods.
The CCRA also aimed to hold educational institutions financially responsible for the results of their students.
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Funding may be impacted, particularly for universities that serve sizable populations of low-income students, if institutions with low graduate earnings in relation to debt are forced to repay the government.
The College Cost Reduction Act, which ultimately failed to pass into law, clearly illustrates the kinds of reforms that lawmakers should consider revisiting in their attempts to reduce education spending.
While some of these reforms could lower borrower expenses, many of them could increase long-term student debt.
