University students steeped in debt, facing the wrath of bill collectors could soon see changes with the way the loan process is handled.
In an effort to make higher education more affordable and accessible in New Jersey and throughout the nation, the College Opportunity and Affordability Act, H.R. 4137, was passed by the U.S. House of Representatives on Feb. 7.
"Tuition at public and private colleges and universities has skyrocketed in recent years, creating a crisis in college affordability," said Rachel Racusen, deputy communications director of the Committee on Education and Labor, in an e-mail.
Racusen said last year Congress enacted a $20 billion increase in additional federal student aid to help students meet the rising prices. "This legislation follows on that new law to address skyrocketing tuition prices and reforms our higher education system from the perspective of students and families, creating a more consumer-friendly, fair and easy-to-navigate system," she said.
Representative Rush Holt, NJ-12, a member of the House Committee on Education and Labor authored many of the bill's provisions.
"It's a long process to pass a bill like that, but it received wide support," said Zach Goldberg, a spokesperson for Holt. "As a former teacher, higher education is very important to [Holt] and making college more affordable is something he's been a long-time proponent of."
Under Holt's provisions the bill would allow Pell Grants - need based grants for undergraduates - to be used all year, for certificate programs and part-time students and the maximum Pell Grant award will increase from $5,800 to $9,000, according to a press release.
Among other initiatives, the bill would develop a Math and Science Incentive Program which would grant loan forgiveness to students who provide five consecutive years of service in a math or science field after graduation. Additionally, grants will go to schools to develop programs that combine foreign language with science.
The bill will also do much to help lower higher education textbook costs. It will force publishers to communicate openly with college professors and require schools to release ISBN numbers to students during course registration periods. It will help make the federal student aid application process simpler and is supposed to provide consumer protection on federal and private student loans.
But Luke Swarthout, New Jersey Public Interest Research Group Student Chapter's higher education advocate based in Washington, D.C. said U.S. PIRG members pushed for an amendment to the bill that would discharge the loans and bankruptcy of students after they have repaid their loans for five years, but it was defeated by the House.
"We are disappointed that the House chose to stand with big banks instead of students who fall victim to predatory private student loans," Swarthout said. "With these loans the lenders lobby to get special protection, so you can never get rid of your loans. If you're persuaded to take a bad deal you're living with that for your entire life. We think that's bad policy and incredibly hard."
Swarthout said within the last 10 years there have been serious changes in college affordability and a significant rise in student loan borrowing including risky and expensive private student loans. He said MTV frequently shows commercials for expensive loans with high interest rates that specifically target students who end up dealing with bankruptcy.
"We were disappointed this was not a piece added to the bill. We should have a system that is fair," Swarthout said. "It's reasonable to ask students to pay some amount of money to finance their education, but we should have a system that doesn't punish them for the rest of their lives."
Racusen said the Senate passed its own version of this legislation in July and the two bills will be conferenced to produce a final piece of legislation.
