Republican Proposals: Universities Facing Accountability for Graduates' Heavy Debt Burdens
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House GOP's College Risk-Sharing Plan Explained
Host AILSA CHANG gives us the scoop on a daring plan tucked inside the House Republicans' budget bill - one that aims to hit colleges hard when their students drown in student debt they can't shake off. Touting this idea as forcing colleges to have "a little skin in the game," Secretary of Education Linda McMahon supports the move to redress college accountability. NPR education correspondent Cory Turner breaks down the skinny on this bold plan.
Turner chats with Jordan Matsudaira, a former top education department official under the Biden administration, who explains the nuts and bolts of the proposal. If a student misses a student loan payment amount of, say, $200, the college would be held accountable for a portion of the missed payment.
The Biden and Obama administrations dabbled in college accountability, but their efforts primarily focused on for-profit colleges. However, the House Republicans' targets are bigger: any higher education institution could fall under penalty. The Congressional Budget Office estimates that the full risk-sharing proposal would save the government over $6 billion over the next decade, given it comes to fruition.
Though, there are snags. GOP senators might not be on board, and political analysts have raised concerns about the math behind the penalties. For instance, if enacted, the plan would exclude loans once they go into default - a puzzling move since the premise is to penalize schools for burying students in debt.
Speaking of which, the American Enterprise Institute's Preston Cooper reckons that the schools facing the brunt of these penalties would mainly be for-profit colleges, like Strayer University and the University of Phoenix, and some big private, nonprofit schools like the University of Southern California (USC). USC's undergraduate programs may not generate eye-popping debts, but its graduate programs are a different story, with Cooper estimating that USC was responsible for almost 1% of the student loans issued annually in the U.S.
HOUSE REPUBLICANS' PLAN GOES THE EXTRA MILE
While the plan mostly whacks colleges with penalties for lagging student outcomes, there's also an upside: a carrot in the form of bonuses granted to schools that provide real value for their low-income students. Instead of debt mills, think mobility engines.
If passed, the nine schools primed to rake in the largest bonuses would be public universities, with three in Florida and six in California leading the pack.
This ambitious plan could have significant repercussions for colleges whenever it's brought up for a vote. Stay tuned for more updates on this tumultuous higher education landscape.
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- The House Republicans' plan, which aims to penalize colleges for student loan defaults, is designed to address college accountability, as proposed by Secretary of Education Linda McMahon.
- The Education-and-self-development sector could witness changes if the House Republicans' plan goes into effect, as it proposes penalties for colleges with poor student outcomes but also offers bonuses for schools that provide value to low-income students.
- The plan, if passed, could potentially save the government over $6 billion in general-news reports, but political analysts have raised concerns about the math behind the penalties and some aspects of the implementation, such as the exclusion of loans in default from the plan.
