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House Democrats unveiled the Aim Higher Act this week, which they say would give students the opportunity to go to college debt free without compromising the quality of their education. The proposed bill is a direct response to the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act, which House Republicans introduced in December.
Aim Higher, just like Prosper, would be a reauthorization of the Higher Education Act – the federal law that controls much of federal spending and lending for postsecondary education. It has not been reauthorized since 2008. Since then, student debt has grown, and 2016 presidential contenders Bernie Sanders and Hillary Clinton made “free college” part of their campaign platforms.
The Aim Higher bill’s debt-free provision focuses on students who want to attend community college. Aim Higher would, the bill states, “provide states with grant aid to leverage reforms and reward states that make tuition at state colleges and universities more affordable. In return, states promise to maintain their investment in higher education, including their investment in state four-year institutions, and make an associate’s degree at the state’s public two-year colleges free for every student.”
The bill summary goes on to say, “Additionally, the bill also provides grant aid directly to low-income students who transfer from a community college to a Minority-Serving Institution (MSI) for the remainder of their degree.”
Here are a few more changes Aim Higher would make.
- Eliminate origination fees for federal loans: Now, each time students borrow they may pay up to 4.264 percent of their loan amount in origination fees.
- Give undocumented students who are eligible for Deferred Action for Childhood Arrival access to federal aid: DACA status protects people who came to the United States as children from being deported. Currently, some states offer DACA recipients in-state tuition and some don’t.
- Increase Pell Grant aid: These grants are for low-income students. For the 2018-2019 school year, Pell recipients can receive up to $6,095. Aim Higher proposes increasing the maximum award amount by $500 each award year and “permanently indexes the Pell award to inflation.”
- Preserve the Teacher Education Assistance for College and Higher Education (TEACH) Grant: Aspiring teachers can receive up to $4,000 through this grant.
- Change the 90-10 rule: The rule prevents for-profit colleges from receiving more than 90 percent of revenue through federal financial aid. Aim Higher would instead prevent colleges from receiving more than 85 percent of revenue from federal aid.
Related: If this bill passes, college affordability would go from bad to worse, experts say
The Prosper act also proposes eliminating origination fees and increasing money for Pell students. It does not mention allowing students with DACA status to receive federal aid, and it would eliminate the TEACH grant. Also, Prosper would eliminated the 90-10 rule, thus allowing colleges to receive up to 100 percent of their revenue from the government and none from students, which some higher education experts say would be a win for for-profit schools.
Both bills propose streamlining the process for completing FAFSA, the Free Application for Federal Student Aid.
The American Association of State Colleges and Universities, the Center for Responsible Lending and Young Invincibles (which advocates for economic opportunity for young adults) all say this bill provides a practical solution to the student debt crisis and would increase access to college for low-income students.
But Aim Higher has yet to address one giant question: How much will this plan cost the government?
It has not yet been assessed by the Congressional Budget Office.
“There are many things that are very expensive in it: the [free] two-year community college and the increase in Pell grants,” said the Democrats’ ranking member of the House Committee on Education and the Workforce, Bobby Scott (D-Va.). But there are also “significant savings in it because we cut out a lot of fraud and abuse.”
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