Welcome to Student Loan News, a weekly summary of developments and events affecting college debt in the U.S. Join us each Friday for a look at goings-on that could impact your own student loan situation.
College enrollment down by 1.5 million since 2013
New numbers from the National Student Clearinghouse Research Center show that 250,000 fewer students enrolled in college in 2019 than in the previous year. According to the data, national enrollment has fallen by more than 1.5 million students since 2013.
All categories of colleges appear to have been impacted by the decline, whether public state universities, private colleges or community colleges. While the decrease could stem from a smaller college-age population and a relatively strong economy (in which more people might be opting to work rather than study), another major factor could be high tuition costs.
How it affects YOU: If high tuition costs are making you think twice about attending college, you’re not alone. But despite these burdensome costs, a college degree remains valuable, typically leading to higher income and greater net worth.
If you’re on the fence about college due to costs, make sure to compare your options, as well as to research opportunities for scholarships. By limiting how much you borrow in student loans, you could enjoy the greater earning potential of a college degree without the burdensome debt that too often goes with it.
New bill includes $1.3 billion increase in education funding
The new spending package to keep the federal government funded through the end of fiscal 2020 includes a $1.3 billion increase in education outlays, a move that the National Education Association called “a huge bipartisan win for students,” according to Politico.
Providing $72.8 billion to the Department of Education, the plan boosts money for federal work-study, Historically Black Colleges and Universities and Hispanic-Serving Institutions, and other programs. Separately, the budget deal would also fund Labor Department initiatives, including job-training grants and money for apprenticeships.
And in more good news for current students, the spending package also increases funding for Pell Grants, boosting the award by $150 to $6,345 for the 2020-21 year.
The House passed the spending bills on Tuesday, and according to reports from the Washington Post and others, the Senate is expected to follow suit this week, with the White House also on board to approve the measures.
How it affects YOU: Although the increases might seem modest, students now seem likely to see at least some increase in their financial aid for 2020-21, whether in their Pell Grant award, work-study allowance, Supplemental Educational Opportunity Grant or other type of financial aid.
Also in the news…
- Education Secretary Betsy DeVos testified before a House of Representative committee late last week, restating her opposition to full student loan forgiveness. Instead, she has proposed partial student loan forgiveness for borrowers who were defrauded by their colleges. The congressional hearing got heated, Politico reports, with tense exchanges between DeVos and some House members.
- A group of Democratic U.S. senators wrote an open letter to Kathy Kraninger, the director of the Consumer Financial Protection Bureau (CFPB), urging her to “take immediate action to resume examinations of student loan servicers’ handling of loans owned by the federal government.” The CFPB has come under fire over the past year for not doing enough to police servicers. (See the second-to-last item in this previous news wrap.)
- A new report from the Education Trust shines a light on the affordability gap facing low-income students at colleges in nearly every state. In 47 of 50 states, low-income students need to work more than 15 hours per week to afford tuition at a state school. And in at least two states, students would need to work more than 40 hours per week.
- Senior administration officials say the White House is putting together a plan to deal with the student loan crisis, according to the Wall Street Journal. While the administration might look into ways to lower interest rates, it has ruled out mass student loan forgiveness, the report said.
- Personal finance startup Pillar said it has launched a new platform called Boost to help borrowers pay off their student loans. The feature — the launch of which coincides with the holidays — uses a crowdsourcing approach to invite friends and family to help pay off a borrower’s student loan debt, the company said.
Publishing note: Our Student Loan News report will pause for the next three weeks, returning on Jan. 17, 2020.
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