WASHINGTON — In a debate over how to best address rising college tuition, the Higher Education and Workforce Development Subcommittee discussed the consequences of recent changes to federal student loan policy on American families.
At Wednesday’s hearing, Republicans blamed administrative bloat for the college affordability crisis. Democrats pointed to a lack of state and federal investment in higher education, unchecked privatization and for-profit colleges.
Average tuition for both public and private four-year colleges has essentially doubled over the last 30 years, after adjusting for inflation, according to CollegeBoard. Both parties emphasized the importance of higher education for a strong American workforce and economy.
“We all agree there is a college affordability crisis in this country,” said Alma Adams, D-N.C., the subcommittee’s top Democrat. “Where we disagree is on the solution.”
Republicans praised their work to change federal loan policy in H.R. 1, now commonly referred to as the One Big Beautiful Bill Act or The Working Families Act. The law imposes new borrowing caps, restructures the repayment system, reduces Pell Grant eligibility and reduces safety nets.
“The Working Families Tax Cuts simplified student loan repayment plans from over 50 options down to just two: a fixed ‘mortgage’ style plan and a ‘repayment assistance plan’ that provides targeted relief to borrowers in need,” committee Chairman Burgess Owens, R-Utah, said.
Owens said that the law will also hold schools accountable for student outcomes and ensure that their degrees improve their financial prospects. He said he is confident that restoring market incentives in higher education will lead to better pricing for students.
“The title of this hearing really should be about working families getting run over by the One Big Beautiful Bill,” Joe Courtney, D-Conn., said. “Again, I know they’re trying to rebrand the H.R. 1 to a different title, but the fact of the matter is, most people in this country have sort of figured out what a scam it is.”
Witness Julie Margetta Morgan is president of The Century Foundation and previously worked in the U.S. Department of Education. She said that the bill leaves students with two options: not attending college because it is too expensive or taking on risky private loans.
“These loans are going to have a higher interest rate, and they are going to have fewer options for people when they get in trouble on paying their loan,” Morgan said. “They don’t have the forgiveness option, they don’t have the income-based repayment options.”
Columbia economics and education Professor Judith Scott-Clayton said, in general, federal student loans have been a safe option for students because they offer many protections, including income-based repayment options, interest rate subsidies and very low default rates.
“All that being said, I think we’re definitely at a moment right now where there is so much chaos going on in the student loan repayment world,” Scott-Clayton said.
Scott-Clayton said families’ hesitation and anxiety about taking on student debt are not unreasonable at this time.
She said universities are feeling pressured because they can’t necessarily count on a guaranteed supply of families willing to pay what they charge every year, especially since the education sector is under fire and students are very price-sensitive.
Wellesley College Economics Professor Phillip Levine created MyinTution, which gives families access to a projected cost of attendance once financial aid is factored in, called the net price.
“It relies on very basic financial characteristics, how much money did you make last year, a few basic asset categories, what do you have in the stock market, that sort of thing,” Levine said. “It is very valuable for the institution to make it possible for prospective students to get off of the sticker price.”
Bob Onder, R-Mo., emphasized bipartisan legislation to improve college price transparency. His Student Financial Clarity Act creates a universal net price calculator and expands the college scorecard for students to compare costs across institutions.
Evan Bertis-Sample is a Northwestern University student from a low-income family. He receives the maximum financial aid package from Northwestern and also takes out a subsidized federal student loan each quarter to cover housing costs.
“I’m a first-generation student, so no one in my family before me has really had to deal with this type of stuff,” Bertis-Sample said. “So I had no advice given to me, so navigating what student loans look like, what financial aid packages are, and how to interpret them was definitely a big struggle.”
The committee has approved the Student Financial Clarity Act, and Onder said he is hopeful the bill will be brought to the House floor soon.