THE PROSPER ACT—a bill that would drastically alter several areas of higher education law—could come up for a vote in the House of Representatives in the very near future. After publishing a previous article on how this bill could negatively impact LGBTQ students, I received a number of follow-up questions regarding this bill and college affordability for queer and transgender people. Here I will address the topic more thoroughly, highlighting two key ways that it could reduce affordable access to higher education for LGBTQ students.
First, it would discontinue interest subsidized student loans from the federal government. Unlike most student loans, direct subsidized loans are only available to students with significant financial need. Under this loan program, the federal government pays the interest on the loan while the borrower is in school. The purpose of this program is to ensure that students with financial hardships can still have access to higher education, which is growing in cost annually. The PROSPER Act would eliminate these types of loans, and this could have a dramatic impact on a number of borrowers.
Economic insecurity can create a number of access barriers for LGBTQ students, especially transgender people and people of color. The Advocate recently noted that LGBTQ students report an average of $16,000 more student loan debt compared to their straight, cisgender peers. Roughly sixty percent of LGBTQ students regret taking out these loans, and over 25 percent report that they have an unmanageable amount of student debt (according to a recent survey from StudentLoanHero.com).
Of course, not every LGBTQ student qualifies for a direct subsidized loan, but the PROSPER Act’s elimination of this program certainly won’t help to alleviate the financial issues that many queer and transgender students continue to face.
Second, it would eliminate existing income based repayment plans and, thus, Public Service Loan Forgiveness (PSLF). In addition to restructuring student loan programs, the PROSPER Act would also “simplify” repayment for borrowers by offering only two repayment plans. These proposed plans include a standard ten-year plan and an income-based plan that’s significantly different. Although several income-based repayment plans are currently offered, the Act’s new plan would be far more costly to borrowers. Under this bill, income-based repayments would be set at fifteen percent of the borrower’s income, rather than a more flexible range, and the principal amount of the loan wouldn’t be forgiven after twenty or 25 years of on-time repayments (as is currently the case).
The PROSPER Act would also have a number of other effects on affordability by eliminating these existing repayment options. Specifically, Public Service Loan Forgiveness (PSLF)—the George W. Bush era program that forgives federal student loans after ten years of repayments while employed in a qualified public service—would effectively end. While the Act wouldn’t directly repeal PSLF, it would eliminate the repayment plans that would make future borrowers eligible for it.
As such, the PROSPER Act could create a difficult situation for LGBTQ students. For instance, many may severely struggle to repay their student loan debt, while others may simply forgo college and/or graduate school altogether. Though this could have an impact across the community, it statistically could create more issues for two demographics in particular—bisexual and transgender persons.
According to demographic data from the Williams Institute, bisexual people report lower levels of educational attainment than their gay and lesbian peers. Further, the National Center for Transgender Equality’s “U.S. Trans Survey” reports that more fifty percent of transgender people don’t have a college degree. Clearly, there are already access, affordability, and degree attainment issues in specific parts of the LGBTQ community. If passed, this bill could simply widen those gaps.
The PROSPER Act appears to have a tough path ahead. Recent circumstances, such as the Democrats’ newly proposed Aim Higher Act and Secretary Betsy DeVos’ proposed regulatory overhaul for defrauded borrowers, are creating more debates about affordable access to higher education. Even so, the impact that the PROSPER Act could have on college affordability for queer and transgender students is certainly a conversation that should continue.
Timothy R. Bussey, PhD, is the assistant director for the Office of Diversity, Equity, and Inclusion at Kenyon College.