Bill Overview
Title: Responsible Education Assistance through Loan Reforms Act
Description: This bill makes various changes to the federal student loan system, including by (1) limiting the authority of the Department of Education to issue regulations, (2) establishing a new income-based repayment plan, (3) repealing the Public Service Loan Forgiveness program for new borrowers, and (4) allowing certain workforce development programs to be eligible for Pell Grants.
Sponsors: Rep. Foxx, Virginia [R-NC-5]
Target Audience
Population: People with federal student loans
Estimated Size: 42900000
- The bill affects federal student loans, implying both current and future borrowers are target populations.
- In 2020, approximately 42.9 million Americans had federal student loan debt.
- Repealing the Public Service Loan Forgiveness program will impact those planning careers in public service.
- Income-based repayment plans usually target borrowers whose income is lower compared to their debt.
- Workforce development programs being eligible for Pell Grants will impact students pursuing skill-based education.
Reasoning
- This policy affects a large group of people, primarily those with existing federal student loans or future borrowers.
- Future public service employees may be discouraged by the repeal of loan forgiveness for new borrowers.
- Low-income borrowers may benefit from the new income-based repayment, potentially reducing financial stress.
- Pell Grant eligibility expansion may increase access to skill-based education, benefiting workforce development students.
- Factors such as age, income level, and employment status will result in varying impacts, from none to high.
Simulated Interviews
Recent college graduate (California)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- I am worried about the potential repeal of the Public Service Loan Forgiveness program as I was planning to work in public service to manage my student loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Public school teacher (Ohio)
Age: 28 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- With the disappearance of forgiveness options for new borrowers, my long-term financial planning feels uncertain.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 6 | 9 |
Nurse (New York)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I am optimistic about the new income-based repayment options. This policy seems to align repayment more with my actual income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Electrician apprentice (Texas)
Age: 24 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Access to Pell Grants for my training will significantly reduce my need for loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Project Manager (Florida)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- I don't think this policy will have a significant impact on me personally.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
High school graduate (Illinois)
Age: 19 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- The changes to Pell Grant eligibility might help me afford skill-based education without massive loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 8 |
Small business owner (New Jersey)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I'm concerned about how these changes might affect my children, especially regarding loan forgiveness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Software engineer (Georgia)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- The new income-based repayment plan might ease my financial pressure slightly, but it's not a huge change.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Medical resident (Michigan)
Age: 29 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- Losing the Public Service Loan Forgiveness is a huge blow to my long-term plans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 7 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 9 |
Retired (Arizona)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I am primarily concerned with how these changes might influence the financial future of my grandchildren.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $5000000000 (Low: $4000000000, High: $6000000000)
Year 2: $5200000000 (Low: $4200000000, High: $6200000000)
Year 3: $5400000000 (Low: $4400000000, High: $6400000000)
Year 5: $5600000000 (Low: $4600000000, High: $6600000000)
Year 10: $6000000000 (Low: $4800000000, High: $7200000000)
Year 100: $7000000000 (Low: $5600000000, High: $8400000000)
Key Considerations
- Administrative and implementation challenges associated with reallocating and setting up the new repayment plans.
- Future savings from repealed programs must be weighed against upfront costs of setting up new plans.
- The impact on educational attainment and workforce skills from expanded Pell Grant eligibility is a key long-term consideration.