Says committee is working on ‘risk sharing’ as part of its bipartisan effort to reauthorize the Higher Education Act this fall
Posted on August 5, 2015
WASHINGTON, Aug. 5 – U.S. Senate education committee Chairman Lamar Alexander (R-Tenn.) today released the following statement on the “Student Success and Protection Act,” introduced today by Sens. Orrin Hatch (R-Utah) and Jeanne Shaheen (D-N.H.) to give colleges and universities a stronger role in sharing the risk of lending to students:
“As our committee works to reauthorize the Higher Education Act, we’ve been studying closely the question of how best to ensure that all of our more than 6,000 institutions of higher education have more ‘skin in the game,’ helping to prevent student overborrowing while at the same time helping to reduce the cost of college,” Alexander said. “We are working to find the right balance in our bipartisan legislation and I commend Senators Hatch and Shaheen for their proposal.”
The bill would establish a new formula for determining a college or university’s eligibility in Title IV student aid programs that is based on the proportion of students at a given institution who are paying back their loans. The bill would also require colleges and universities to make risk-sharing payments to the U.S. Department of Education for loans that are not being repaid. Both provisions aim to create the incentive for institutions to make student loan repayment and cost reduction a higher priority.
The Senate education committee’s third hearing this Congress on the Higher Education Act, held on May 20, was about how best to give institutions of higher education more “skin in the game” (click HERE for the chairman’s opening statement). Senator Jack Reed (D-R.I.) testified at that hearing about his proposal, introduced with Senator Elizabeth Warren (D-Mass.), to force colleges to have some “skin in the game.” At the hearing, Alexander called their proposal “an important framework worth considering.”
In March, Alexander’s education committee released a staff white paper on this concept of “risk sharing” seeking input from the higher education community (click HERE to read the white paper).
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For access to this release and the senator’s other statements, click here.To stay up-to-date on the senator’s latest actions, follow him on Twitter and YouTube.