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What the New College Funding Landscape Looks Like in 2020

Updated: Jun 18

By now most people know college is expensive and is only getting more so. We also know that student loans are becoming a problem for lots of people leaving college. This isn’t news as it’s been an accelerating issue over the last decade or two if not longer. Now though we’re finally seeing this catch the eye of our governmental officials. No one ever said they move fast, but they do like making changes with hot topic items even if they are or aren’t meaningful. Now, especially with the upcoming election, we are seeing both sides of the aisle come out with multiple big name legislations that are meant to aid our growing problem surrounding college affordability. From the HELPER act to the FUTURE act here is a breakdown of the main points on what is coming out of Washington and how it’ll affect people’s ability to fund college.




COLLEGE AFFORDABILITY ACT (CAA) – Introduced Oct. 15 2019


The CAA is a bill being pushed mostly by the democratic party. Their statement is that it would cost the government less than the recent tax cuts, and lower the cost of college, improve education, and expand opportunities for people from all backgrounds.


· Federal government pays states to make community colleges tuition free

· Pays states extra money who community colleges that offer programs to help students stay in school

· Increase in Pell Grants (need based aid). Will cover more things, a.k.a students will get more money, and will last for more years (14 semesters = 7 years)

· Gives colleges incentive to lower admission standards and prioritize schools that serve students of color, with disabilities, and low-income.

· Helps simplify the student loan process and looks to create a simplified income-based repayment plan available to all borrowers.

· Accountability measures on schools that cause students to default on loans or pay to much on advertising their school (i.e. certain for-profit colleges)


The HIGHER EDUCATION LOAN REPAYMENT AND ENHANCED RETIREMENT (HELPER) Act – Introduced Dec. 2nd 2019


The HELPER bill put forth by Rand Paul is a way to improve the ability to pay for college without increasing government involvement into education which the bill argues will raise costs even higher and lower the value of our tax dollars to cover it.


· Allows Americans to take up to $5,250 from a retirement account tax and penalty free to pay for college or pay off student loans. This allows for a family with a mom, dad, and student to pay up to $15,750 of college on a pre-tax basis per year.

· Removes the cap on deducting student loan interest on taxes

· Allows employers to pay for student loans up to $5,250 tax free

· Allows employees to take employer paid contributions to a 401(k) as a roth (after-tax) contribution which helps younger employees who would benefit from such a set-up.


The FUTURE Act – Introduced May 2nd 2019 – Signed by President on 12/19/19


An act that was the product of compromise from both sides of the aisle that helps streamline administration of financial aid and extend much needed funding to HBCU schools.


· Creates a link between the IRS and the US Dept. of education to streamline the financial aid process.

· Makes income certification easier for income-based repayment plans on student loans

· Extends federal funding for minority serving college institutions


SETTING EVERY COMMUNITY UP FOR RETIREMENT ENHANCEMENT (SECURE) ACT – Introduced March 29th, 2019 – Signed by President on 12/20/2019


This piece of legislation is more focused on items related toward retirement which we’ll follow up on through another piece later, but still has meaningful college education affects.


· Allows for students to pay off student loans with 529 money

· Allows for students to use 529 money in order to pay for any fees associated with an apprenticeship.


The first two are more theoretical and may or may not get pushed forward depending on upcoming elections. The last two have recently been passed and are likely to stick. There are surely other ideas out there, but these are the ones that have gained traction on the hill up to this point.

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