In January 2024, House Education and the Workforce Committee Chairwoman Virginia Foxx introduced the College Cost Reduction Act (H.R.6951), a legislative package that would make significant changes to how the federal government finances higher education. The package includes proposals to reduce access to federal student loans for many students and to make loan repayment more expensive. It would also repeal accountability measures enacted to protect students from predatory colleges and debt taken on while enrolled at fraudulent institutions.
While TICAS shares Chairwoman Foxx’s stated goals of protecting students and taxpayers and lowering college costs, her proposals would instead likely increase college costs, enable predatory colleges, and make it harder for students to manage loan repayment.
Rather than advancing the CCRA’s misguided proposals to roll back regulations and cut off aid to students, Congress should instead increase grant aid, make student loan repayment easier, and enshrine accountability measures to protect students and taxpayers from fraud and abuse at the hands of predatory colleges.
The CCRA Would Empower Predatory Colleges
The CCRA would repeal three common-sense policies to protect students, veterans, and students who have faced fraud and misrepresentation. Congress and previous administrations put these policies into place in response to widespread abuse. They were developed over years of expert negotiation. Repealing them would undo years of progress and bipartisan efforts to prevent fraud and hold colleges accountable to their students.
First, the CCRA proposes to wipe away the gainful employment rule, which sets the requirement for career-focused programs to adequately prepare their students to earn sufficient incomes to repay student debt without overwhelming burden.
The CCRA would also strip the Education Department of its longstanding authority to provide debt relief to borrowers whose institutions defrauded them or closed suddenly. As recent research shows, “students who experienced a closure were 50.1 percent less likely to complete a credential than students who did not experience a closure.” Stripping away closed school discharge authority would leave students who attended closed schools burdened by debt that only makes their financial footing shakier.
Last, despite a bipartisan agreement passed by Congress and signed into law nearly four years ago, the CCRA would repeal the 90/10 rule—a requirement that for-profit institutions demonstrate baseline financial viability by having at least 10 percent of their revenues come from non-federal sources. Before a committee of negotiators (that included for-profit college representatives) reached consensus on regulatory language to close this loophole, certain veterans’ education benefits did not count as federal sources of financial aid. Chairwoman Foxx’s legislation would return to the days of student veterans being targeted as dollar signs in uniform.
The CCRA Would Make Student Loans More Costly
As a previous TICAS analysis shows, if enacted, the CCRA would lead to increases in student loan payments, leaving some students indebted for their whole lives. The bill would also make student loan repayment significantly more expensive for current and future borrowers by increasing monthly payments—likely driving more borrowers into delinquency and default. The CCRA would not preserve the existing safeguard that protects borrowers from carrying debt for more than 25 years.
The CCRA Would Shrink Pipelines for Crucial Occupations
The CCRA offers a novel risk-sharing proposal to require colleges to repay a portion of their students’ debt burdens if the students cannot make their payments. As noted above, TICAS shares the goal of addressing college costs and appreciates the need to be attentive to problematic debt burdens. However, we believe that building on existing policies—those enacted based on decades of research and negotiation—is a more effective approach.
To the extent that policymakers would like to consider new approaches, such as the CCRA’s risk-sharing proposal, they must carefully consider all the possible effects—intended and unintended—of such proposals. We are especially concerned that the CCRA’s risk-sharing model could restrict access to socially valuable yet lower-paying fields, including teaching and social work.
Past Urban Institute analysis has noted that earnings-based accountability measures applied to master’s degrees would have significant occupational effects if they are not adjusted for field of study. TICAS finds similar effects in our most recent analysis, noting the troubling effects this proposal would have for programs that prepare teachers and social workers.
Worthwhile Proposals Overshadowed by Harm to Students and Colleges
These harmful provisions overshadow several otherwise worthwhile proposals that would improve our higher education system: codifying critical investments in the Postsecondary Student Success Grant program, improving consumer information about college costs, and making common-sense technical fixes to the student loan repayment system, including fully eliminating interest capitalization.
Our higher education system needs reform—but not in the way the CCRA attempts, which would cause further harm to students and colleges. We urge lawmakers to maintain a focus on college affordability, continue to reduce the burden of student debt, and increase protections for students and taxpayers from waste, fraud, and abuse.
