Experts testify on bipartisan bill to reform student financial aid

Higher education experts testified before the House Education and the Workforce Committee on Wednesday and weighed in on efforts to reform the federal financial aid system.

Committee Members Reps. Tom Petri (R-Wis.) and Jared Polis (D-Colo.) introduced the bipartisan Earnings Contingent Education Loans Act in an effort to streamline repayment of student loans.

If the measure were approved, all borrowers would be enrolled into an income-based repayment system. It would use an employer-withholding program to ensure that payments could be adjusted in response to income fluctuations.

New America Foundation Federal Education Budget Project Director Jason Delisle testified that the income-based student loan repayments are currently allowed; they’re just not automatic.

Eighty-nine percent of students support automatic enrollment into an income-based repayment plan, according to a survey by non-profit group Young Invincibles.

“As part of an improved system, we recommend either automatically enrolling all borrowers in income-based repayment or allowing them to opt out of income-based repayment and into standard repayment if they deem it a better repayment plan for their individual needs,” Young Invicibles Deputy Director Jennifer Mishory said.

HCM Strategists Founding Partner Kristin Conlkin said there is “a remarkable amount of consensus” that universal income-based loan repayments should be adopted. She also commended Petri for being an “early leader” on the reform effort.