While Senate Republicans last week hashed out the details to pass a bill that would hike taxes for the middle class in order to slash them for corporations, House Republicans unveiled a higher education bill that would broadly reshape how the federal government pays for and regulates college — by cutting back on various student aid programs while also lifting current regulations that require for-profit colleges to meet certain thresholds to receive tax dollars.

Reps. Virginia Foxx, R-N.C., and Brett Guthrie, R-Ky., of the House Committee on Education and the Workforce on Friday introduced the bill, titled the Promoting Real Opportunity, Success, and Prosperity through Education Reform, or PROSPER, Act. Foxx, who chairs the committee, and Guthrie are the point people for House Republicans when it comes to higher education policy and will now start looking for co-sponsors for the bill, which has a long road to passage.

House Democrats, for their part, have not introduced legislation as a comprehensive alternative, but progressives have been enlisting co-sponsors for the College for All Act, which would make public colleges and universities tuition-free.



The 542-page Republican bill would have a wide-ranging impact on higher education, but two of the proposals stand out for their immediate impact on students and colleges: reductions in traditional aid programs and rollbacks of regulations limiting federal funding to for-profit colleges.

The bill would, for instance, completely eliminate the Public Service Loan Forgiveness program, which forgives student loans for borrowers who work for a nonprofit or in a state, local, or federal government job and make 120 qualifying monthly payments over a period of 10 years. More than half a million borrowers have utilized the program since 2007 to help them deal with student debt. Gregory Crespi, a Southern Methodist University law professor who studies the program told the ABA Journal that roughly a quarter of jobs in the U.S. economy would be considered public interest jobs.

The legislation would also consolidate the student financial aid system, shifting it toward a “one grant, one loan” model, which could threaten subsidies offered to borrowers. It would also introduce caps on graduate student loans.

University of Southern California Law School professor Michael Simkovic wrote in a blog post that he worries such caps could would be most beneficial to the private lending market.

“These measures, if enacted, would be a boon to private student lenders like Sallie Mae, who would be able to both increase their prices and increase their market share as federal student loans become less competitive and less available,” Simkovic wrote. “Consequently, expected financing costs for students will likely increase, to the detriment of both students and educational institutions.”

It would possibly also shortchange the government.

“According to a study by the Government Accountability Office and the Department of Education, loans to graduate and professional students are the most profitable in the government’s portfolio — even after income-based repayment and debt forgiveness,” he noted. “Capping loans to these attractive borrowers may reduce the overall profitability of federal student lending and pave the way for arguments for more cuts to federal lending in the future.”

Debbie Cochrane, vice president of the Institute for College Access Success, pointed out in a statement that the bill would also “start charging millions of low- and middle-income students interest on all of their loans while they’re still in school, adding thousands of dollars to students’ loan balances.”

While curbing certain forms of student aid, the bill would also loosen the purse strings on federal dollars to for-profit colleges by eliminating certain regulations.

For instance, it would do away with the so-called “90/10 rule.” Under this rule, for-profit colleges are barred from receiving more than 90 percent of their revenues from Department of Education Title IV federal aid, which includes various loan and grants programs.

It would also eliminate gainful employment rules. These regulations from the federal government establish minimum thresholds in terms of the debt-to-income ratios of the graduates of for-profit colleges. Colleges that do not meet this threshold therefore become ineligible for federal aid.

“Where students are the losers under this proposal, the clear winners are for-profit colleges. By gutting regulations designed to ensure that schools provide the education students have paid for, this bill would have the taxpayers write a blank check to colleges that overcharge and under-deliver,” Cochrane said in a statement.