Late last year, House Republicans proposed a major reform of the federal government’s student aid programs for higher education. The Congressional Budget Office recently released its official score of the bill, which is dubbed the Prosper Act. Republicans have latched onto the score to defend the bill as an act of fiscal responsibility, while Democrats and advocates have labeled the bill as a cut to student aid, claiming it slashes benefits and “hits students hard.”
But both groups are wrong. The best available estimate of the bill’s impact shows that it would actually increase federal spending on student aid over the next 10 years. At first glance, the CBO estimate for the Prosper Act appears to show savings for the government.
