The PROSPER Act is one of the Republican-led bills that eliminates some federal student aid programs for lower-income undergraduates. Meanwhile, a new study finds 58 private college presidents raked in at least $1 million each in annual salary in 2015.
Republicans in the House recently revealed a new bill titled the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act, which will effectively end many well-known federal services allotted to students through the Higher Education Act. The Senate will follow the House and draft their own legislation for PROSPER and have a goal of releasing it early next year, The Hill reported.
The PROSPER Act eliminates the Federal Supplemental Educational Opportunity Grant, which was put in place to assist lower-income undergraduate students who otherwise would not be able to afford college. The current grant amounts for students range in total from $100 to $4,000 a year, based on financial need.
The act would also raise interest rates for millions of people per year who take advantage of student loans, by starting to wind down the Federal Perkins Loan Program, which currently offers low-interest loans.
The legislation would also get rid of many regulations former President Barack Obama looked to implement on for-profit colleges. The act would axe the gainful employment rule that conditions a school's access to federal student aid on whether or not students land decent-paying jobs following graduation.
This bill would also, in the future, prohibit the US secretary of education from creating similar rules.
However, one of the most significant policy changes relating to students comes in the form of the House tax reform bill that is currently in circulation waiting to be combined in to a final bill with the Senate’s version of the legislation.
The House version would eliminate an important deduction students use after accruing interest on student loans. Students are currently allowed to deduct up to $2,500 of any interest paid on their student loans. If the tax reform bill as a whole passes with the House version provision, that deduction for students will be eliminated, according to The Hill.
The bill would also affect tuition waivers by taxing these waivers that are used by some grad students who conduct research for universities, or teach classes, in exchange for free tuition. It should be noted that students already have to pay taxes on living and housing stipends, which can hold a value of tens of thousands of dollars.
As this and other large changes are making their rounds in the form of new legislation in the Republican-controlled Congress, a new national study released on Sunday, conducted by the Chronicle of Higher Education, shows that private college and university presidents who were in office over two years, saw their annual earnings go up by an average of 9 percent.
This is according to a detailed yearly analysis of private campus compensation, using the most current federal tax filings available. The data as a whole was compiled with an analysis of 500 institutions.
The findings state that the number of presidents of private colleges earned $1 million or more, rose by almost half in 2015. Fifty-eight presidents were cited as being part of this earning bracket, while only 39 were known to make this much money in the previous year.
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“The number of presidents earning over $1 million is unusually high,” Dan Bauman, a database reporter for the Chronicle, said, according to the Pittsburgh Post-Gazette. “We attribute that, in part, to a market where presidents are negotiating more deferred compensation and bonus packages before they take the job.”
The analysis shows that nine of the 10 highest paid presidents earned more from bonuses and deferred compensation packages than from their base pay. The deferred packages highlighted in the Chronicle's analysis were fully paid out in 2015, while some of the aforementioned packages spanned as long as 10 years.
These deferred compensation packages are often given to presidents as an inducement to keep them in office, according to the study.
In July, a group of 19 Democratic state attorneys general banded together to sue US Education Secretary Betsy DeVos, following her decision to delay the implementation of an Obama-era federal rule designed to protect students from predatory loans offered to them by for-profit colleges.