On Friday, House Republicans released a 542 page higher education bill that could reshape how Americans pay for college.
The PROSPER Act could impact many dimensions of higher education, but one of the most significant is its proposed overhaul of the $1.3 trillion federal student loan program. It changes how much parents and students are able to borrow, and would entirely eliminate certain loan-forgiveness programs.
The bill describes the "wind-down of Federal Perkins Loan Program." Perkins Loans are low-interest federal student loans for low-income undergraduate and graduate students. The interest rate for Perkins Loans is 5 percent, while the average fixed rate stands at 9.66 percent. By eliminating this program, the bill would raise interest rates on the student loans of financially needy students.
The bill would also end loan-forgiveness programs for public-service employees. Under the current Public Service Loan Forgiveness (PSLF) Program, public servants who make regular payments on certain federal student loans can have their remaining debt forgiven after 10 years.