On January 11, Representative Virginia Foxx introduced a comprehensive bill aiming to reduce the cost of college and reform the student financial-aid system. Foxx represents North Carolina’s 5th District in the United States House of Representatives and currently serves as the chairwoman of the House Committee on Education and the Workforce.
The stated goal of the College Cost Reduction Act is “to lower the cost of postsecondary education for students and families.” The bill is divided into three main sections that focus on accountability and student success, transparency, and access and affordability. On January 31, the bill passed its committee vote and will now head to the full House of Representatives.
Foxx spoke with the Martin Center on January 30 to help break down how this bill would tackle the rising cost of college and burdensome student-loan debt. The following transcript has been edited for clarity and length.
Martin Center: Why this bill, and why now? Could you share the context of this new legislation?
Virginia Foxx: I am in my second term as chairwoman of this committee. In my first term, we worked on a reform for post-secondary education—we weren’t able to get a bill passed out of the House. But we think the time is right now, because there’s bipartisan agreement that debt is too high for students who’ve gone to college, college costs are too high, completion rates are too low, and far too many students are worse off after attending post-secondary education than they were before they went, in terms of having debt. So we think that it’s important that we stop doing patchwork solutions to the problems that exist in post-secondary education and deal with them on a comprehensive basis. So we want to lower the costs of colleges and universities for students and their families. And we also want increased accountability and transparency, and we want to see students have a gain as a result of their attending a college or university.
“Right now, there is no transparency in the cost of education.”Martin Center: One way this bill addresses transparency is by requiring the College Scorecard website to streamline program-level data on college costs, financial aid, and student outcomes. It also requires the College Scorecard to include a universal net price calculator. Can you tell us more about how this calculator would work and what kind of information students would need to provide? How should students use this tool in making college decisions?
Virginia Foxx: Well, right now, there is no transparency in the cost of education, or in the financial aid that’s going to be available to the student. In fact, in some cases, it appears as though the colleges and universities try to hide that information from the students. And so what we want is for the colleges and universities to be very clear: This is what it’s going to cost you in every aspect—tuition fees, any extraneous kinds of money, room and board, etc. And this is the financial aid that you will be getting, whether it’s aid from the institution, or if it’s [a] Pell Grant, or if it’s loans. But right now, that is not presented to students in a clear way.
In fact, students are often misled by the cost and the financial aid that’s available. We want to stop that from happening. We want the students and their families to know upfront what it’s going to cost, what their aid is going to be. It’s pretty simple: There’s a sticker cost—we know that a lot of schools say it’s going to cost X amount. But then when you drill down, you find out that they have all kinds of exceptions to the rules. And what you wind up actually paying can be quite different from what the sticker cost is. We just want everybody to know exactly what his or her expenses are going to be and what the aid is going to be. I know I’m repeating myself there. But it’s truly important to say it over and over again.
Martin Center: Could you tell us about the proposed PROMISE grants—how can schools be eligible for these extra funds?
Virginia Foxx: This is part of the accountability measures. In the bill, we want the colleges and universities to be helping students be successful in their programs. We want them to be graduating students on time, which has traditionally been four years. But I will tell you, [there is a] very high rate of students who are graduating only after six years. In fact, most schools, when they report their graduation rates now, they’re doing it on a six-year basis because so many students are staying six years. But, again, our goal is to have students complete in four years, if at all possible, with as little debt as possible. And we want those students to be graduating in programs that are going to help make them successful when they leave the university, so that they get a high return on the money that they spend on their degree.
Martin Center: This bill sets loan limits for how much students can borrow. What is the maximum students can borrow, and are there exceptions?
“We don’t want students borrowing a lot of money and then being in a difficult situation repaying that money.”Virginia Foxx: For undergraduate students, the maximum amount is $50,000. For graduate students, it is $100,000, and for students in graduate professional programs, it is $150,000. We are lowering the amount of money that students will be able to borrow. And the most significant thing is that the rates are going to be based on the programs that they’re in. So if a student is going to major, let’s say, in social work, which doesn’t pay a lot of money, we don’t want those students borrowing a lot of money and then being in a difficult situation repaying that money. So we give the flexibility to the schools to advise the students on how much they can [and] should borrow. And that is something that I think is really important.
Right now, under the law, schools can’t discourage students from borrowing too much money. They might be borrowing a lot of money and going into a program that doesn’t pay much. The University of Southern California is sort of the poster child for this, where a master’s degree in social work costs about $180,000. But the average pay in social work is about $53,000. And so you have these students borrowing ridiculously high amounts of money and [finding] it very difficult to pay the money back. So the main thing is to lower the amount of money overall that they borrow, but also make sure the schools have the flexibility to counsel the student on what their income is going to be.
Martin Center: For student-loan repayment, the bill pares down the confusing array of federal repayment plans to two: a standard 10-year “mortgage-style” plan and one income-driven repayment plan. Can you tell us more about how the income-driven repayment plan would work?
Virginia Foxx: Yes, we do know that there will be people going into professions where they don’t make a lot of money. And we don’t want to totally discourage people from being able to do that. Certainly, we need social workers, we need policemen, we need teachers, we need people in the helping professions—they don’t pay a lot of money. And so what we do is we set up a formula so that the students aren’t forced to pay so much that they find themselves unable to live and eat. And so we’ve set up an income-driven repayment plan, that concept has been around for a long time. This would help the students, again, borrow responsibly and pay back responsibly. The goal is to continue the values we have in our culture, where if you borrow money, you pay it back. But you can be given some grace, if you’re going into one of these programs. And we want to show that.
Martin Center: As a follow-up on that point, there is a provision that if students are repaying on time through this program, at least half of their payment would go to paying the principal instead of just interest. This would happen even if the payment does not fully cover the accrued interest. Could you tell us a little bit about that?
Virginia Foxx: Because interest rates vary tremendously, that’s so that students don’t wind up just paying interest and never getting the debt paid off. That has happened under the current systems that we have. And we don’t think that’s right. We want the students to pay back what they borrow. But because of the variable interest rates that occur with these loans, we don’t want the rates to be usurous.
“Taxpayers are on the hook when students don’t pay off their debts.”Martin Center: Colleges and universities under this bill will be held to a new level of financial accountability. How does the bill require schools to have more “skin in the game”? And how does this benefit students and taxpayers?
Virginia Foxx: Well, we know that, again, many colleges and universities don’t really care about how high tuition and their fees go, because they expect the federal government—meaning taxpayers—to continue to put money into financial aid. And then the taxpayers are on the hook for when students don’t pay off their debts. We want schools to be mindful of the fact that they have a responsibility to keep the cost lower and to help the students complete [their degrees] and counsel them about paying back their debt.
If schools have a situation where a lot of students aren’t paying off their debt, then the schools will be held responsible for paying off that debt. We want the schools to have responsibility here. And we think that will make a huge difference in: number one, the cost; number two, the counseling that the students get in terms of borrowing money; and three, the counseling the students get about repaying their money. The idea is, a lot of people are going to have skin in this game. The students have time and money in it. Parents will have money in it. And the schools and the taxpayers have money in it, because we back up the loans. Now we want the schools to be responsible also.
Martin Center: How does this bill facilitate much-needed accreditation reform?
Virginia Foxx: There’s been a lot of concern about accreditation in the last few years, particularly. And let me go back. You asked “why now?” on this piece of legislation, and I mentioned some things, I didn’t mention accreditation. We really do think there’s been a coming together of many different issues at one time, which [are] the high debt, the high cost, what happened with COVID—how a lot was revealed during COVID, how the anti-semitism is out there. There are a lot of things that have come together, and accreditation is one piece of that. I think our accreditation system has become pretty staid. We want the accreditors to be looking at outcomes, and they have not been doing that. We want the accreditation to be focused on outcomes. The accreditors have said they want to do that, and we want to get them to do that.
The other thing is, right now, the accreditors go by districts in the country. For example, in North Carolina, it’s the Southern Association of Colleges and Schools, and they’ve been around for a long, long time. If you’re up in the northeast, it’s the northeast accreditation body, or out west, they have one. We think it would be useful if the schools could change accreditors. And we think that would be helpful. I know in North Carolina the legislature has passed a bill on this issue. So it’s not just we at the federal level who are concerned about accreditation, but it’s getting to be an issue that states are getting concerned about, too. We want to shed some light on the accreditors and what they’re doing or not doing in terms of showing people the quality of the program that they’re participating in.
“We want education to be an exciting place for people at every level.”Martin Center: Are there any other parts of the bill that you would like to highlight?
Virginia Foxx: We do focus, again, very much on outcomes. I have a middle initial, which is “A.” It used to stand for “Ann.” But I tell everybody it stands for “accountability.” Our focus on this bill really is accountability in every way that we have looked at it. Taxpayers are giving a lot of money to colleges and universities. And we want everybody getting this money to be more accountable for it. You know, about 70 percent of the people in this country don’t go to college or have never been or never completed. And they’re the ones footing the bill for the 30 percent. I’m a person who grew up very, very poor. And I’m interested in seeing that every penny of taxpayer dollars is spent as well as it can be spent. And because this is my area of expertise, and I’m one of the few people in Congress who has ever had any experience here, I’m taking my expertise and putting it to work in this particular area.
This is the most exciting time in the world to be involved in education, because of all the tools that are out there. We want education to be an exciting place for people to be at every level, whether you’re a faculty member or a staff member or a student or a parent, because education truly is a key to success. Education and hard work are the keys to success in our culture.
Shannon Watkins is the research associate at the James G. Martin Center for Academic Renewal.