By: Gina Luke, assistant director, AVMA Governmental Relations Division
Educational debt in the United States now exceeds $1.1 trillion—surpassing national credit card debt and auto loan debt—and because student borrowers struggle to manage their debt, lawmakers have signaled that they will work on improving student financial aid in the 114th Congress.
This Congress will tackle the reauthorization of the Higher Education Act (HEA), which authorizes the major federal student aid programs that are responsible for the majority of financial assistance to postsecondary students, such as veterinary students. Lawmakers will use the reauthorization to augment current law and will continue to focus on transparency, accountability, cost, quality and access. In the few short weeks that Congress has been in session, two bipartisan groups of senators have already introduced two bills to reform federal student financial aid.
On Jan. 7, Senate Health, Education, Labor and Pensions Committee Chair Lamar Alexander (R-Tenn.) and Sen. Michael Bennet (D-Colo.), along with Sens. Richard Burr (R-N.C.), Angus King (I-Maine), Cory Booker (D-N.J.) and Johnny Isakson (R-Ga.) reintroduced the Financial Aid Simplification and Transparency (FAST) Act (S. 108). Although the text of the bill is not available yet, it is expected to be nearly identical to its predecessor in the 113th Congress.
While much attention has been focused on the provisions to simplify the Free Application for Federal Student Aid (FAFSA), of specific interest to veterinary students are provisions that would also:
- establish a single graduate and professional federal loan by eliminating GradPLUS and subsidized Stafford loans;
- establish a $30,000 to $45,000 annual loan limit and a $150,000 aggregate loan limit for graduate and professional students; and
- consolidate repayment options into a single income-driven plan and a 10-year plan.
Also on Jan. 7, Sens. King and Burr introduced the Repay Act (S.85). Sen. King, in his summary of the bill, claims that the bill will “simplify the complex maze of federal student loan repayment programs” with a fixed 10-year and an income-driven repayment option. Senators Alexander, Mark Warner (D-Va.), Marco Rubio (R-Fla.) and Susan Collins (R-Maine) also co-sponsored the Repay Act. Sen. Alexander stated that he would like to combine the bills as a foundation for reauthorization of the Higher Education Act this year.
In 2014, the median indebtedness of veterinary medical school graduates was an astronomical $134,470. The AVMA recognizes the increasing burden of educational debt on new graduates and its implications for the veterinary profession and is working hard in Washington to ensure the veterinary profession’s concerns are heard.
During the HEA reauthorization, the AVMA will seek to maximize the flexible repayment options for borrowers, particularly when a borrower’s debt-to-income ratio is at its highest level. In addition, the AVMA will continue supporting legislation in line with existing association policy that aims to ease the burden of student loan debt held by veterinary students. To that end, the AVMA would support bills resulting in:
- improving terms and conditions on federal student loans for veterinary students, including measures dealing with borrowing limits, grace, forbearance, default and interest rates.
- protecting support for the federal Public Service Loan Forgiveness (PSLF) Program.
- broadening choices for federal loan consolidation programs including more options in fixed or variable interest rate choices and the ability to reconsolidate or refinance loans.
- establishing federal grant and scholarship programs for veterinary students.
- improving financial literacy and debt management counseling offered by universities to students.
- discouraging predatory lending practices.
- expanding educational opportunities to traditionally underrepresented groups.
- encouraging the transparency of institutional academic fees.
We will continue to keep AVMA members informed as these discussions take shape in the 114th Congress.