PROSPER into the Future?

PROSPER into the Future?

Noah Welte

As the national debate rages on regarding the value and affordability of higher education, proposed sweeping changes in the long-overdue reauthorization of the Higher Education Act (HEA) seek to address where individuals go to college, how they pay for it, what they study, and how their academic outcomes affect the institutions they attend. In December 2017, Congress unveiled its newest proposal to revamp HEA, dubbed the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act. The recommended bill substantially alters how the federal government targets and distributes federal student aid funds, while addressing reform around the more controversial topics of campus sexual assault and free speech.

HEA was signed into law in 1965 by President Lyndon B. Johnson with a purpose “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.” The most recent reauthorization (2008) expired in 2013 with an extension provided until 2015 while lawmakers prepared for changes and amendments.

A hallmark of the PROSPER Act is a philosophy of one loan, one grant. While on the surface, the aim is to simplify the financial aid process, the result is a slashing of programs until only one loan and one grant remain. This includes the elimination of the Supplemental Education Opportunity Grant (SEOG), which provides access for the poorest students, and the removal of interest subsidies for low income borrowers, negating potential savings from the proposed loan origination fee exclusion. However, the proposed legislation does allow for a $300 PELL Grant bonus for students taking 15 credit hours or more per semester.

The PROSPER Act also proposes new borrowing limits based on borrower circumstances. Dependent undergraduates could borrow up to $39,000 throughout their college career with an increase to $60,250 for independent undergraduates. Graduate students could borrow $28,500 annually ($150,000 total). Parents are limited to borrowing $12,500 per year and $56,250 per student.

Currently, nine different loan repayment options exist. The PROSPER Act proposes two options for the ONE loan: (1) standard 10-year repayment plan or (2) single income-based repayment option. Students under the income-based option would still be responsible for the amount of principal and interest as if under the 10-year standard plan; therefore, no loan forgiveness on the principal exists. Also, students borrowing under the ONE loan program would not be eligible for Public Service Loan Forgiveness.

The PROSPER Act places additional risk-sharing burdens on institutions. For instance, institutions will be liable for any unearned aid the student received prior to withdrawal from a program of study and are required to conduct annual loan counseling for all students. Also, student access to borrowing would be restricted to programs where at least 45 percent of students are in positive repayment status. Programs not meeting that threshold would not receive federal funds. As colleges continue to pour resources into reducing withdrawal rates and to fiscally educate students, adding unknown financial burdens to the institutions will provide more challenges in these efforts.

Finally, the PROSPER Act regulates campus sexual assault and free speech. The proposed bill mandates institutions annually disclose any policies held related to protected speech on campus, including policies limiting where and when speech may occur. In addition, while not binding on institutions, the proposed legislation states that free speech zones and restrictive speech codes are at odds with the First Amendment, and institutions should not restrict students through such means.

With regard to sexual assault, the PROSPER Act would, among other things, require institutions to develop and distribute “know your rights” forms, conduct climate surveys every three years, prioritize professional investigations over campus investigations at the request of law enforcement (without impacting provision of resources and/or interim protections), and allow institutions to set their own standard of evidence to be used in disciplinary proceedings. Most notably, the PROSPER Act encourages institutions and local law enforcement to enter into memorandums of understanding to collaboratively address campus sexual assault.

Currently, the PROSPER Act has been passed out of the House of Representatives Committee on Education and the Workforce, and is awaiting consideration by the full House of Representatives. In January, President David A. Armstrong, J.D., delivered a letter to representatives in Congress praising key components of the legislation while expressing concerns and areas for improvements to strengthen the bill to better serve Thomas More College’s students and community.

If you would like to learn more about the impact of issues related to higher education compliance, I cordially invite you to attend the Second Annual Thomas More College Institute for Higher Education Compliance Conference scheduled for July 23 and 24, 2018. Higher education law and policy expert, Peter Lake, from Stetson College of Law, will be present to offer both a pre-conference bootcamp and the opening keynote. In addition Title IX experts, Gina Maisto Smith and Leslie Gomez from Cozen O’Connor, are back by popular demand to deliver a can’t-miss closing session.

For more information, visit