Chairman Alexander Re-Introduces FAST Act
January 8, 2015
Chairman Alexander Re-Introduces FAST Act, Hopes to Move Student Aid and Loan Repayment Simplification Package after ESEA Reauthorization
Prepared by: Wes Huffman (whuffman@wpllc.net)
Senate HELP Committee Chairman Lamar Alexander (R-TN) and Sen. Michael Bennet (D-CO) re-introduced the FAST Act yesterday. This version of the legislation, S. 108, includes several additional original cosponsors: Sen. Richard Burr (R-NC), Sen. Johnny Isakson (R-GA), Sen. Angus King (I-ME), and Sen. Cory Booker (D-NJ).
The “FAST Act,” would simplify the FAFSA to two questions—household size and household income—to be answered via a “Student Aid Short Form.” It goes further in its simplification plans by including a proposal for “One Grant-One Loan-One Work Study” and consolidating existing repayment options. Under this plan, Perkins and SEOG would be eliminated to account for one grant (Pell) and one loan (Direct). The Federal Work Study program would remain in place.
Of course, the COHEAO Campus Flex Proposal could still fit within the confines of the One Grant-One Loan-One Work Study structure, as it would simply be replacing “One Work Study” with “One Campus Based” allocation which schools could use as funds for grants, work-study, or a revolving fund. COHEAO will continue to advocate for the preservation of Perkins Loans while also highlighting Campus Flex as a more flexible and friendly alternative to “One Grant/One Loan/One Work Study” for both campuses and students.
Chairman Alexander has indicated moving this legislation is a high priority for the HELP Committee, ranking behind the reauthorization of the Elementary and Secondary Education Act. Hearings are expected to re-start on higher education this month, or February at the latest. Alexander said he hoped to have the FAST Act, coupled with the REPAY Act, a Direct Loan repayment reform bill also introduced yesterday, to the Senate Floor by the end of spring. This seems like a rather ambitious timetable given the controversy and complexity of ESEA—not to mention that these bills represent major changes to the student aid programs are obviously highly controversial in their own right.
However, the introduction of the FAST Act and the REPAY ACT are clear evidence that Alexander and others in the Senate are intent on moving quickly on simplification efforts. It will be important for Perkins Loan advocates to remain engaged with their legislators to help them understand the importance of a federal campus-based loan program, even within a Title IV simplification effort. Additional information from COHEAO on Perkins Loan advocacy is available online: http://goo.gl/Cfayqc
Given the introduction of this legislation by the Chairman of the Senate HELP Committee, the Hill visits at the upcoming COHEAO Annual Conference may be the most important in recent memory. If you have the opportunity to come to the conference and advocate on behalf of campus-based loan programs, COHEAO would greatly appreciate the support. Registration is available online: http://goo.gl/rjcV7q COHEAO will be in touch with Perkins Loans advocates in the coming days and weeks with updated information and message points in response to these latest legislative efforts at simplification.
Additional Details on the FAST Act & REPAY Act
Beyond the changes to one grant/one loan, the FAST Act would also drastically change loan limits in the Stafford Loan program. The bill would also give institutions broader authority in limiting borrowing. A summary of the “FAST Act” from the 113th Congress is available online: http://goo.gl/zeuRhm. Our discussions with Sen. Alexander’s staff indicate the only substantive change is the de-coupling of undergraduate and graduate aggregate loan limits—the $150,000 cap for graduate and professional students will not include undergraduate debt.
In addition to the FAST Act, yesterday saw the introduction the REPAY Act. The bill was originally introduced by Sens. Richard Burr (R-NC) and Angus King (I-ME) in the last Congress. They were joined by Chairman Alexander, Sen. Susan Collins (R-ME), Sen. Marco Rubio (R-FL), and Sen. Mark Warner (D-VA) as original cosponsors.
The REPAY Act would consolidate repayment programs to one standard plan and one income driven plan for new borrowers. It also extends the forgiveness term to 25 years for borrowers with federal loans greater than $57,500, the current maximum cap for undergraduate borrowers. This version of the bill includes a GAO study on simplifying repayment processes, a nod to the automated employer withholding repayment scheme previously supported by Warner and Rubio. A summary of the REPAY Act is available online: http://goo.gl/Ot8d3x
