WASHINGTON | April 17, 2018
The Committee on Education and the Workforce received the following letter from President Mitch Daniels of Purdue University praising the PROSPER Act. Here is what President Daniels had to say:
The Honorable Virginia Foxx
Chair, House Committee on Education and the Workforce
1230 Longworth House Office Building
Washington, DC 20515
Dear Chairwoman Foxx,
Thank you for the many years of thoughtful leadership you have provided higher education. From a small business owner, community college administrator to Congress and now as Chairwoman of the influential Education and Workforce Committee, you have been a tireless advocate for our nation's students.
I am encouraged to see the House Committee on Education and the Workforce view reauthorization of the Higher Education Act as an opportunity for reform. The PROSPER Act puts forth a comprehensive framework to address many of the most intractable challenges facing institutional improvement and student success.
Higher education has been slow to answer legitimate questions about cost and value as well as to meet changing workforce needs. At the same time, students, their families and taxpayers have paid an ever escalating price resulting in historic individual and national debt. College is out of reach for far too many students and, as importantly, those re-entering the workforce or attempting to improve their skills.
PROSPER Act reforms are designed with an underlying goal to support students in completing an affordable postsecondary education that will prepare them to enter the workforce with the skills they need for lifelong success. I join those supporting many of the legislative reforms that enjoy broad and bipartisan support such as streamlining student lending programs, reducing the regulatory burden and improving the accreditation system.
Making schools share in the risk of student loan debt, which directly ties to college completion, just makes good and common sense. At Purdue, first we strive to reduce the overall cost of attendance so students will graduate with the minimum debt possible. The cost to attend Purdue University is lower than it was in 2012 with seven straight years of a tuition freeze combined with lower room and board rates and significant discounts on books and supplies through the university's Amazon partnership.
Purdue was the first major research university in the US to offer an income share agreement (ISA) as an alternative to Federal Plus and private student loans. An ISA has no principal balance or interest, so its payments adjust with the student's income over the life of the contract, and payments don't begin until the student is employed and at a salary above a previously established minimum. Purdue is funding the program with institutional and donor funding--full "skin in the game."
Purdue is proactive in supporting the success of our students with a variety of academic resources, including learning communities and active-learning classes, supplemental instruction and tutoring, and coaches for at-risk students. Through our partnership with the University Innovation Alliance, we are working to help students across the socioeconomic spectrum graduate. Hopefully, the PROSPER Act will result in similar institutional action across the nation.
PROSPER's proposal to discontinue the Public Service Loan Forgiveness Program for new borrowers is a step toward addressing unfunded mandates and eliminating perverse incentives. As the program currently stands, "public service" is defined very broadly, and includes any job at any level or government or at a nonprofit organization, which according to Government Accountability Office estimates, constitute about one-quarter of all jobs. PSLF is especially generous to doctors, lawyers, and other professionals who can potentially have significant unpaid graduate school debts forgiven after 10 years, despite post-graduation incomes that would allow eventual repayment of remaining debt. The result is an incentive to borrow more for graduate school, and nearly 30 percent of PSLF enrollees carry more than $100,000 in federal student loan debt. PSLF is tax-free, which delivers the largest benefit to higher income borrowers in higher tax brackets.
PROSPER’s focus on making postsecondary education more affordable warrants higher education’s support. Students and taxpayers will benefit from an HEA reauthorization that confronts the issue of cost. PROSPER is a fine step in that direction.
Again, thank you for your leadership. I look forward to watching as the legislation moves through the House of Representatives.
Mitchell E. Daniels, Jr.
To learn more about the PROSPER Act, click here.