High Aims for Aim Higher?

Earlier today, House Democrats gathered in a briefing room on Capitol Hill and introduced the Aim Higher Act. In large part, the legislation packages bills from a legislative campaign started last year, the Aim Higher initiative, which focused on making college more affordable. With lots of ideas popular among the electorate, the Aim Higher Act also puts a stake in the ground ahead of the upcoming November midterm elections.

While the bill text is not yet available, the bill summary highlights some key reforms: increasing the size of the maximum Pell Grant by $500 each year and indexing the grant to inflation, making incarcerated and undocumented students eligible for federal aid, and modernizing the formula for Supplemental Educational Opportunity Grants (SEOG) to better target the aid to low-income students. This is a notable contrast to education committee chair Virginia Foxx’s HEA reauthorization bill, the PROSPER Act, which would cut benefits borrowers currently have available, like the student loan in-school interest subsidy for low- and middle-income borrowers, minimize the loan forgiveness benefits available under income-driven repayment plans, and keep the maximum Pell Grant steady at its historic low purchasing power. On the contrary, the Aim Higher bill would significantly increase spending on schools and students.

Aim Higher also makes some important moves to improve college completion. For instance, it tackles the challenge of remedial education, where millions of students every year wind up stuck in non-credit-bearing courses that cost them money without putting them closer to a degree. Aim Higher would provide grants for evidence-based strategies to get more students the remediation they need without seeing so many drop out of college altogether. And while free community college might be a nonstarter with Republicans, the Democrats’ proposal for it includes strong incentives for public two-year institutions to improve their completion rates through research-based proven and promising practices.

But not everything in the bill would be a net positive. The legislation would band-aid over a significant problem of nonrepayment and unaffordable debt for parents who borrow (as much as the full cost of attendance at the school) to pay for their children’s education using PLUS loans. Rather than providing enough grant aid to let low-income students and their parents afford college, or reforming the program so that only parents with a demonstrated ability to repay can borrow, or holding colleges accountable for packaging PLUS debt with parents who ultimately default on the loans, it would simply make Parent PLUS loans eligible for income-driven repayment (IDR) plans. IDR, which is designed to serve as a safety net for students whose education doesn’t pay off, is singularly ill-suited for parent loans, where the parent obviously isn’t expected to see an earnings bump from his or her child’s education. Funnelling Parent PLUS borrowers who can’t afford their debt into IDR plans is virtually guaranteed to make the non-repayment problem worse, threatening the long-term viability of the program.

Despite some improvements to accountability (especially for for-profit colleges, where the bill would close a long-standing loophole that lets colleges exclude military and veterans education benefits from the calculation in the amount of revenue they can get from the federal government), there’s little earth-shattering reform posited in the bill, especially in the way of stronger accountability. And the bill would allow existing borrowers to refinance their loans into lower interest rates -- an idea that’s popular and sounds like it would help students, but that costs billions of dollars, of which the typical borrower would see about $8 per month. Spending so much to get so little isn’t a smart, targeted use of taxpayer dollars.

At the end of the day, it seems clear that neither the PROSPER Act nor Aim Higher are likely to become law. And with the two parties clearly so far apart on their policies, a Higher Education Act reauthorization seems less and less likely by the minute. Plus, after the elections this fall, political dynamics could shift considerably. Those looking forward to major reforms in higher education will just have to wait.