HEA Faces Tough Conference (2/22/2008)

When Congress returns from the week long recess on Monday, one item of unfinished business that remains on its to-do list is reauthorizing the Higher Education Act (HEA). Both chambers passed their own versions of the HEA, which is currently operating under an extension through March 31st. Due to some contentious issues between the two bills, pre-conference negotiations continue to delay the release of a final conference report. The Senate passed S. 1642 on July 24th, while the House just recently passed H.R. 4317on February 7th. Although both bills passed by overwhelming majorities (354-58 in the House, 95-0 in the Senate), the two bills still need to find common ground before a final conference report is released.

S. 1642 would:

• Increase the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Direct the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Require colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

H.R. 4317 would:

• Give the U.S. Education Department (ED) significantly more authority to regulate private student loans, as part of a broad set of provisions — prompted by last year’s investigations into illegal inducements given to colleges by lenders — aimed at cracking down on the behavior of lenders and college officials in making loans to students;
• Bar ED from issuing regulations governing higher education accreditation, designed to ensure that colleges are measuring student learning outcomes;
• Set a ceiling on the maximum Pell Grant of $9,000, and allow students to receive Pell Grant funds year-round, instead of just during the traditional academic year; and
• Require States to maintain their financial support of higher education and allow ED to withhold some funds to States that cut their college appropriations — an idea endorsed by some college officials but strongly opposed by many state legislators.

Conferees have yet to meet on the two bills, but negotiations between key staff members and members of Congress continue to take place behind closed doors. Members of Congress seemed intent on finishing the HEA this year, something they have been unable to do since 1998. While appropriations will likely be the top priority in the next few months, Congress may move quickly to get a final bill to the President before the March 31st deadline.

Resources:
Stephen Langel, “Senate Unanimously Approves Higher Ed Reauthorization,” Congress Now, July 24, 2007.
Stephen Langel, “House Easily Approves Higher Ed Reauthorization; Conference Up Next,” Congress Now, February 7, 2008.
Author: SAS

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House Passes HEA Reauthorization (2/8/2008)

Last night, the House passed H.R. 4317, which reauthorizes the Higher Education Act (HEA), by a vote of 354-58. By passing the bill, the House finally caught up with their counterparts in the Senate, who passed their own HEA reauthorization bill last summer. Although the conference date has yet to be set, both chambers are pushing for quick negotiations, despite a possible veto threat. Lawmakers are aiming to have the bill signed into law by March 31st, when the current HEA extension runs out.

As the House worked their way through the twenty-seven amendments offered on the House floor, eventually accepting all but one, higher education advocates began to see the possibility of the first HEA reauthorization in roughly ten years. Although there was a contentious debate regarding the level of funding for Pell grants, the bill received overwhelming bipartisan support. The House bill goes beyond the matter of college affordability, which was addressed in the College Cost Reduction Act, signed into law last year. The bill would:

• Give the U.S. Education Department (ED) significantly more authority to regulate private student loans, as part of a broad set of provisions — prompted by last year’s investigations into illegal inducements given to colleges by lenders — aimed at cracking down on the behavior of lenders and college officials in making loans to students.
• Dictate that colleges craft plans for giving students legal ways to download movies and music, and explore technologies to stop illegal peer to peer file sharing. This provision had been strongly opposed by several college groups, especially since those promoting it based their arguments largely on data about campus downloading that have since been shown to be seriously flawed.
• Bar ED from issuing regulations governing higher education accreditation, designed to ensure that colleges are measuring student learning outcomes. Education Secretary Margaret Spellings vehemently opposes the provision and will try to alter it when House and Senate negotiators meet to craft a compromise version of the Higher Ed Act legislation in coming weeks. The legislation would also create a new federal position, an “ombudsman,” to intervene in disputes related to accreditation.
• Extend to three years from two the period the federal government uses to calculate the rate at which student loan borrowers default, but delay implementation of the change until 2012.
• Set a ceiling on the maximum Pell Grant of $9,000, and allow students to receive Pell Grant funds year-round, instead of just during the traditional academic year.
• Require States to maintain their financial support of higher education and allow ED to withhold some funds to States that cut their college appropriations — an idea endorsed by some college officials but strongly opposed by many state legislators.
• Under the Academic Competitiveness Grant Program, make grants for low-income students available to part-time students and those seeking certificates as well as degrees.
• Take the Education Secretary out of the business of deciding whether high school programs are of sufficient academic rigor to quality students for the grants, leaving that decision instead up to state officials.
• Mandate that textbook publishers expand the information they provide to faculty members about pricing and changes from past editions. Colleges would be required to include more information about required books in the course schedules to help students shop for books more cost effectively.
• Crack down on diploma mills by directing ED to publish lists of accredited institutions and accreditation agencies.
• Make it easier for students to get information about their financial aid awards and generally simplify the process by which students — particularly those from low-income families — can qualify for federal financial aid.
• Establish a loan fund to help colleges and universities damaged or otherwise impaired by natural disasters such as the 2005 hurricanes in the Gulf Coast.
• Toughen standards for teacher education programs.

Despite the number of amendments, there are only minor differences between the House and Senate versions. This should allow conferees to get a reconciled bill to their respective floors for a vote by the end of the month.

The final hurdle is a possible veto threat from the Bush Administration. The White House issued as Statement of Administration of Policy yesterday saying it “strongly opposes” this legislation because it limits the U.S. Department of Education’s authority, creates numerous expensive and duplicative programs and wrongly conditions receipt of federal grant funding on tuition price. Despite the President’s opposition, Congressional leaders continue to expect the bill to become law this year, due to the large support base on Capitol Hill.

Resources:
Stephen Langel, “House Easily Approves Higher Ed Reauthorization; Conference Up Next,” Congress Now, February 7, 2008.
Doug Lederman, “House, Focusing on Cost, Approves Higher Education Act,” Inside Higher Ed, February 8, 2008.
Author: SAS

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House Set to Pass HEA (2/1/2008)

The House is finally set to move forward with its version of the Higher Education Act (HEA) reauthorization next week. The House Rules Committee will sift through proposed amendments on Wednesday, and set the ground rules for debate, expected to begin on Thursday. If the House is successful in passing the bill on Thursday, conferees could meet the following week, possibly getting the bill to the President before the end of the month.

The House Education and Labor Committee passed an HEA bill last November, but the delayed appropriations cycle pushed most other initiatives onto the backburner. Over the past few weeks, Senate leaders, who passed their HEA legislation last summer, pushed for their House colleagues to pass a bill so the two chambers can go to conference. The House committee bill would:

• Streamline the federal student financial aid application process;
• Make textbook costs more manageable for students by helping them plan for textbook expenses in advance of each semester;
• Allow students to receive year-round Pell Grant scholarships;
• Strengthen college readiness programs;
• Increase college aid and support programs for veterans and military families;
• Improve safety on college campuses and help schools recover and rebuild after a disaster;
• Ensure equal college opportunities and fair learning environments for students with disabilities; and
• Strengthen our nation’s workforce and economic competitiveness by boosting science, technology, and foreign language educational opportunities.

Once the bill passes through the House, conferees can begin negotiations on a final reauthorization package. Depending on how quickly the two chambers can come to an agreement, members of the higher education community may see final legislation by the end of the month. HEA reauthorization, which is roughly five years overdue, could be a key victory for Democrats, who failed to reauthorize No Child Left Behind (NCLB) last year. While there is some cautious optimism regarding NCLB’s chances for reauthorization this year, Democrats can help pad their track record by finally passing an overhaul of the nation’s higher education system.

Resources:
Libby George, “Higher Education Law Overhaul Could Give Democrats a Legislative Win,” CQ Today, January 14, 2008.
Niels Lesniewski, “House Rules Planning to Take Up College Opportunity and Affordability Act on Feb. 6,” Congress Now, January 29, 2008.
Author: SAS

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State of the Union (1/28/2008)

In his final State of the Union Address, President Bush laid out a broad domestic agenda that included an emphasis on economic growth, federal fiscal discipline, a request to strengthen and reauthorize the No Child Left Behind Act (NCLB) and to provide parents with more school choice.

Beginning with the economy, the President urged Congress to pass the economic stimulus package agreed to by Speaker of the House Nancy Pelosi (D-CA) and House Majority Leader John Boehner (R-OH). The package, estimated at about $145 billion, is aimed at putting more money into the hands of American consumers to help stimulate the stagnant U.S. economy. Although the Senate is expected to make additions to the stimulus package, there is currently no language for any school construction funding, which is a priority for education advocates.

The President's willingness to sign off on such an expensive stimulus package means that he will be less agreeable to increased spending during the fiscal year 2009 (FY09) appropriations process. The President will release his FY09 budget proposal on Monday and, like last year, it is likely that there will be many program reductions and an estimated 44 program cuts for the United States Department of Education (ED).

President Bush next announced his disappointment at Congress' failure to reign in the practice of earmarking funding for special projects in members' Congressional districts. The President championed fiscal restraint by announcing an executive order to federal agencies to ignore any future earmarks that are not written specifically into bill language. Under the order, future earmarks would be subject to public scrutiny and votes and he promised to veto any spending bill that does not succeed in cutting earmarks in half from fiscal year 2008 levels.

Focusing on education, the President called on Congress to strengthen and reauthorize his key domestic legacy, NCLB. "No one can deny its results," said Bush. "Last year, fourth and eighth graders achieved the highest math scores on record. Reading scores are on the rise. And African-American and Hispanic students posted all-time highs." Building on this success, the President identified four ways that Congress, with his approval, could strengthen the law. "We must work together to increase accountability, add flexibility for States and districts, reduce the number of high school dropouts, and provide extra help for struggling schools." Working together, however, will prove challenging in 2008. The President has already stated his intent to veto any bill that would weaken the law's accountability provisions and he has clearly stated his displeasure with the draft proposed by the Chairman of the House Committee on Education and Labor, George Miller (D-CA), last summer. The conventional wisdom is that the House and Senate will both introduce draft language in 2008, but a conference and final passage will likely roll over into 2009, after the 2008 elections.

Speaking to his conservative base, the President next addressed school choice. According to the President, inner city non-public schools are disappearing at an alarming rate. To address this, he proposed to convene a White House summit aimed at strengthening the supply of these schools so parents of "poor children trapped in failing public schools" could have better options. To help children access these schools, the President proposed a new $300 million program called Pell Grants for Kids. But like last year's proposed Promise Scholarships and Opportunity Scholarships, the Pell Grants for Kids has little chance of success. This idea will not likely gain considerable support in this Democratic Congress.

Finally for education, the President called on Congress to fund his American Competitiveness Initiative. Congress passed H.R. 2272, the 21st Century Competitiveness Act last year that authorized over $33 billion over the next three years to support 25,000 new math and science teachers through professional development and graduate education assistance as a part of the President's initiative. Yet, due to the contentious budget battles between the President and Congress much of the funding was not appropriated. The President would now like to see those initiatives funded in order to "ensure America remains the most dynamic nation on earth."

The President's State of the Union truly begins the second session of the 110th Congress. Pundits will review and analyze the speech in the coming days and many of his initiatives will become clearer when the President releases his FY09 budget proposal on Monday, February 4th. We will continue to monitor and analyze the developments as they occur.

Resources:
"2008 State of the Union Policy Initiatives,"The White House, http://www.whitehouse.gov/stateoftheunion/2008/initiatives/index.html
"President Bush's State of the Union Addresses," Washington Post, January 28, 2008, http://www.washingtonpost.com/wp-dyn/content/article/2008/01/28/AR2008012802536.html?sid=ST2008012802201
State of the Union, http://stateoftheunion.onetwothree.net/
Authors: SAS, DAD

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Road Map for Next Legislative Session (1/18/2008)

The House reconvened this week, and the Senate is expected to come back into session after the Martin Luther King, Jr. holiday. As Congress gets back into its groove, the first item on the agenda is a $145 billion economic stimulus package, which may
include funding for school construction and repair. The bill seems to have bipartisan support in Congress and in the White House, though the particulars of the bill may prove to be contentious. Once the stimulus package is finished, there are a number of other items Congress is likely to consider this year.

No Child Left Behind

On January 28th, the President is scheduled to give his State of the Union address, which often acts as a springboard for most of the year’s legislative priorities. While the President is expected to focus on Iraq, immigration reform, and other recent, hot-button issues, he is also expected to again call for Congress to reauthorize No Child Left Behind, his landmark K-12 education legislation.

As 2008 is the President’s last year in office, and he begins to consider the legacy his administration leaves behind, he will want to try and end on the seemingly positive note of reauthorizing NCLB, a program that he considers his biggest domestic success over the last eight years.

While he will focus on what the law has done over the past few years, he will also warn Congress not to weaken the law that is intended to have all students in the U.S. performing at proficient levels in math and reading by 2014. However, because the law is a divisive issue in Congress, as well as among the 2008 Presidential candidates, politics will most likely push NCLB into the backseat, until after a new Congress and a new President begin their work in 2009.

Higher Education Act

The Senate passed its reauthorization of the Higher Education Act (HEA) last summer, but the House has been dragging its feet, bogged down in a number of other legislative efforts. House Education and Labor Chairman George Miller (D-CA) did finally pass a reauthorization bill out of committee towards the end of last year, but the House has not moved forward with the committee’s bill.

Senate leaders, chiefly Senate Health, Education, Labor and Pension (HELP) Committee Chairman Edward Kennedy (D-MA), are calling for the House to bring its bill to the floor as soon as possible so that the two bills can go to conference. The sense of urgency comes from the fact that as soon as Congress gets bogged down in both fiscal year 2009 (FY09) appropriations and the 2008 Congressional elections, time will run out for the HEA to be reauthorized by the 110th Congress.

Farm Bill

The Senate passed its Farm Bill package in December, finally catching up with the House, which passed its bill earlier in the year. While some negotiations have gone on behind the scenes, the bill has yet to go to conference, keeping farmers, agricultural groups, and school nutrition advocates waiting on the largest agricultural bill in the country. School nutrition advocates are looking forward to the proposed expansion of the Fresh Fruit and Vegetable program (FFVP) into all fifty states.

School nutrition coalitions are advocating for the final bill to include the Senate’s expansion, which calls for $225 million for fiscal year 2008, with each state receiving 1% of the total appropriation. The rest will be divided up among the states based on the total number of students eligible for free and reduced price lunches. Advocates are also calling to include the House’s provision that sets aside 5% of each state’s allocation for administrative purposes.

One item that did not make it into the Farm Bill is Sen. Tom Harkin’s (D-IA) amendment that would impose national nutrition standards on all public schools in the United States. Sen. Harkin has made it his personal quest to make these standards part of the law, but chose not to bring it into the Farm Bill, which is already in the middle of tough negotiations.

Harkin worries that even if the House and Senate come to terms on the bill, Congress will not be able to work out a deal with the White House regarding differences over the bill. As such, much of what goes on in conference will include both the differences between the House and the Senate as well as worries from the White House, so that the final version of the bill will have the best possible chance to make it through the veto threat already levied against the bill.

Appropriations

The President will release his FY09 budget proposal on February 4, starting the next appropriations cycle. Experts expect last year’s battle to be repeated again this year. The same forty or more education programs that the President has tried to eliminate in past years will be slated for elimination again this year, accompanied by leaner budget estimates.

The President proved last year that with Democrats in control of Congress, he is willing to stand firm on his proposed numbers, and will veto any bills that go too far above and beyond his requests. His willingness to work on the economic stimulus package will further cause him to be tight with his budget outlook for the rest of the year, and he will continue to have enough Republican support in Congress to sustain a veto.

Last year, The President forced appropriators to bring their total level of spending down to his desired levels, after a lot of posturing and grandstanding. If Congress want to avoid that for FY09, they will have to wait until the next president takes over in January 2009, an option that neither party is happy with. Ignoring the fact that the majority cannot guarantee that its party will win the Presidency, there is also a lot of bad publicity that comes with holding off appropriations until the start of the following year.

In 2006, when former Senate Majority Leader Bill Frist (R-TN) decided to punt the spending bills until 2007, he was lambasted by both parties in each chamber of Congress. The Democrats may not want to risk the public backlash from delaying appropriations so late for two consecutive years, meaning it is possible that they could give in to the President’s request a little earlier this year. Needless to say, appropriations will, as always, be a tough process this year.

Author: SAS

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Report Shows Higher Ed Spending Up, Despite Budget Issues (1/11/2008)

Last year proved to be a difficult year for states regarding budget concerns. As of now, 2008 is not looking any better. Many states of various sizes and locations are facing budget shortfalls and fiscal crises, forcing them to either keep education funding at current levels, or possibly consider serious education cuts. However, despite this disturbing trend, a report released by the Illinois State University Center for the Study of Education Policy shows that state spending on higher education is rising. Public college and university officials and employees are experiencing a good year, but other forecasts show that this could be very short lived.

State appropriations for higher education are up 7.5% for the 2008 fiscal year. This is the largest percentage increase for colleges and universities in a decade, according to the report. Total state support for higher education this year is currently projected to be over $77.5 billion. That number is based on state operating support, but it does not include funds for facilities or funds that are provided by students through tuition. Over the last decade, the percentage change in total state support has fallen as low as a 2.1% annual decrease, but has rebounded recently. However, other studies released in the last month, as well as grim budget forecasts in many states, suggest that this may be a peak year, with some troubled times ahead.

The recent increases in funding mirrors national concerns regarding both the increasing cost of higher education, and a focus on keeping American students competitive globally. However, as budget constraints become tighter, education is often one of the first areas to suffer stagnation and cuts. Unfortunately, current trends indicate that tighter times are ahead. A study by the National Governors Association and the National Association of State Budget Officers warns of “significant deterioration” of state budgets. The National Conference of State Legislatures also warns that there are rough fiscal waters ahead, so institutions of higher education may want to enjoy the good times now, while they still can.

Resources:
Scott Jaschik, “State Appropriations Are Up ... for Now,” Inside Higher Ed, January 11, 2008.
Author: SAS

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Changes Proposed to the National Apprentice System (1/4/2008)

The U.S. Department of Labor recently issued a Notice of Proposed Rulemaking (NPRM) in the Federal Register (72 Fed. Reg. 71019) to update the regulations implementing the National Apprenticeship Act of 1937 (29 CFR Part 29). This is the first major overhaul of the regulations since they were promulgated. In the NPRM, the Employment and Training Administration (ETA) stated that the new proposed regulations would enable the National Apprenticeship System to:

Keep pace with changes in the economy and corresponding workforce challenges, continue apprenticeship’s vital role in developing a skilled, competitive workforce, and further promote registered apprenticeship as an important talent development strategy offered through the public workforce investment system.

The Apprentice System regulations set labor standards, policies and procedures for the registration, cancellation and deregistration of apprenticeship programs, and apprenticeship agreements. They also provide for the recognition of a State Apprenticeship Agency as an agency authorized to register local apprenticeship programs for Federal purposes, and for the revocation of such recognition.

The major proposed revisions are supposed to enhance flexibility in the requirements for provision of related technical instruction, permit competency-based progression through an apprenticeship program, establish requirements for education and training of apprenticeship instructors that align with developments in the workforce and education systems, and strengthen oversight of program performance. The proposed rule also updates 29 CFR Part 29 to incorporate gender neutral terms and technological advances in the delivery of related technical instruction.

ETA is inviting interested persons to submit comments on this proposed rule. To ensure consideration, comments must be in writing and must be received on or before February 11, 2008. See the full Federal Register notice for more information on how to submit comments at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-24178.pdf.
Author: CWP

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Higher Education Bill Still Not Ready for President

In addition to appropriations work, Congress still must prepare a Higher Education Act (HEA) reauthorization bill for the President. The Senate passed their version earlier this year, but the House Education and Labor Committee finally passed their own version just before the Thanksgiving break. The bill, H.R. 4137, still needs to get through the House floor before the bill can go to conference with the Senate.

Following previous efforts in Congress this year, H.R. 4137 looks to help rein in the rising cost of higher education, making it more affordable for middle and low-income families to send their children to college. The bill increases the maximum authorized Pell grant for low-income college students to $9,000 per year, from $5,800, and would allow the grants to be used year-round. The bill will also:

• Streamline the federal student financial aid application process;
• Make textbook costs more manageable for students by helping them plan for textbook expenses in advance of each semester;
• Strengthen college readiness programs;
• Increase college aid and support programs for veterans and military families;
• Improve safety on college campuses and help schools recover and rebuild after a disaster;
• Ensure equal college opportunities and fair learning environments for students with disabilities; and
• Strengthen the nation’s workforce and economic competitiveness by boosting science, technology, and foreign language educational opportunities.

It is unclear how quickly Congress will move on the bill, but momentum picked up last month when Congress decided not to move forward on reauthorizing the No Child Left Behind (NCLB) Act. House and Senate leaders want to push at least one major education reauthorization package through before the end of the year, but the time constraints may force lawmakers to carry efforts over into next year.

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House Poised to Move on HEA

The House Education & Labor Committee is set to mark up a reauthorization package for the Higher Education Act (HEA) next week. Committee Chairman George Miller (D-CA) originally planned to wait until after reauthorizing No Child Left Behind (NCLB), before moving on the HEA. Upon Senator Edward Kennedy’s (D-MA) announcement that the Senate would not move on NCLB this year, Rep. Miller moved up efforts on the HEA, hoping to finish before Congress adjourns for the year.



The Senate passed its own version of the HEA reauthorization earlier this year. S. 1642 would:

• Increase the amount of information that schools and lenders must provide to students, including an up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Direct the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and

• Require colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

Although Rep. Miller has yet to introduce his own legislation, it is not expected to look too different from the Senate version. Both Miller and Kennedy would like to get the HEA completed before breaking for the year, a fact that Miller may keep in mind when marking up the House bill. Along those lines of cooperation, Miller is not expecting much Republican opposition to reauthorization efforts. House Republicans already introduced their own HEA bill, which Miller may pull from in drafting his own proposal. Miller’s stated goals for the HEA are to:

• Encourage colleges to rein in price increases and provide consumers with helpful information;
• Restore integrity and accountability to the student loan programs;
• Simplify the federal student aid application process;
• Make textbook costs more manageable;
• Strengthen our workforce and our competitiveness;
• Expand college access and support for low-income and minority students;
• Increase college aid and support for veterans and military families;
• Ensure equal college opportunities for students with disabilities; and
• Boost campus safety and disaster readiness plans.

Although the House may be able to mark up and pass the bill next week, a conference between the two versions is not likely until after the Thanksgiving break.
Resources:
Stephen Langel, “Head Start Agreement Bodes Well for Higher Education Act,” Congress Now, November 8, 2007.
Author: SAS

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HEA Extended Through March

As the President signed another extension for the Higher Education Act (HEA), the House Education and Labor Committee held a hearing on the rising cost of college. The hearing, which examined factors contributing to tuition increases as well as possible solutions to help make college more affordable, came on the heels of a report on rising college prices released last week. According to the report, tuition and fees at four-year public colleges have increased by 31 percent in the last five years, after adjustment for inflation. The report, released by the College Board, also found that tuition prices were up at public and private colleges and at two-year and four-year colleges. Through H.R. 2669, the College Cost Reduction Act, Congress has already taken steps towards making college more affordable, most notably by increasing the maximum Pell grant award. However, as Committee member Ric Keller (R-FL) pointed out, “what good is it for Congress to raise financial aid by $2,000 if colleges increase tuition by $3,000?”

Witnesses at the hearing included:
• King Alexander, President of California State University at Long Beach;
• Dr. John E. Bassett, President of Clark University in Worcester, Massachusetts; and
• Jane V. Wellman, Executive Director of the Delta Cost Project in Washington, D.C.

Panelists testified that drastic fluctuations of state appropriations contribute to the increase in costs. Mr. Alexander, in reply, noted that a stricter federal/state partnership would make it more difficult for states to shift the costs of higher education to students, and ultimately, federal tuition-based programs. Witnesses also testified about the non-educational expenses incurred by colleges, such as housing, food, and health services for students. To address price increases, witnesses recommended increasing transparency and making a wide range of data available to families, including student debt information, tuition and fee increases, and information about how colleges and universities spend money.

Prior to this week, George Miller, the Chairman of the House Committee on Education and Labor, stated that HEA reauthorization would wait until Congress addressed the reauthorization of No Child Left Behind (NCLB). That, however, has proven difficult and now the Committee may address HEA before NCLB. Chair Miller may, in fact, introduce an HEA bill as early as next week and attempt to move it through Committee and bring it to the floor prior to the Thanksgiving break, beginning on November 16th. We will monitor the action closely.

Resources:
Charles Dervarics, “Rising Tuition Raises Ire of Congress, Which Is Constantly Being Asked to Raise Student Aid,” DIVERSE: Issues in Higher Education, November 2, 2007.
House Education and Labor Committee Press Release:
http://www.house.gov/apps/list/speech/edlabor_dem/rel110107.html
Author: SAS

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Secretary of Education Amends ACG and SMART Grant Regulations

The Secretary of Education recently amended the regulations for the Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs. The purpose of the amendments is to reduce administrative burden for program participants and to clarify program requirements. The new regulations are effective as of July 1, 2008. The amendments were announced on Monday in the Federal Register. 72 Fed. Reg. 61248 (Oct. 29, 2007).

There are a number of changes to the applicable higher education regulations, 34 CFR Part 691, as a result of the regulations, some very minor, while others more substantial. Among the changes are the following:
• Requiring an institution in which a student is currently enrolled to determine the student’s academic year progression based on the student’s attendance in all ACG and National SMART Grant eligible programs only at that institution.
• Adding a new provision to require that when determining the appropriate academic year for a transfer student, the institution to which the student transferred must count both (a) the number of credit or clock hours earned by the student at prior institutions that are accepted for the student, and (b) an estimated number of weeks of instructional time completed by the student.
• Adding a new provision requiring three alternative methods to determine the weeks of instructional time for a student’s academic year progression, and to provide that an institution choosing to use one of these alternative methods must do so for all students enrolled in the eligible program.
• Clarifying that when determining academic year progression for a student, an institution may not assign any weeks of instructional time to certain credit or clock hours accepted toward a student’s eligible program if those credit or clock hours were earned from Advanced Placement (AP) programs, International Baccalaureate (IB) programs, testing out, life experience, other similarly earned credits or credits earned while not enrolled as a regular student in an ACG or National SMART Grant eligible program, or coursework that is not at the postsecondary level, such as remedial coursework
• Clarifying that an institution must assign weeks of instructional time to determine National SMART Grant eligibility for periods in which a student was enrolled in an ACG-eligible program before declaring, or certifying his or her intent to declare, an eligible major.
• Clarifying that, for purposes of eligibility for ACG and National SMART Grants, an institution that assesses grade point average (GPA) on a numeric scale other than a 4.0 scale must ensure that its minimum GPA requirement meets the same numeric standard as a cumulative GPA of 3.0 or higher on a 4.0 scale.
• Clarifying that institutions are required to calculate a student’s GPA for determining second-year ACG eligibility as follows:
o For a student who transfers to an institution that accepts into the student’s ACG eligible program at least the credit or clock hours for one academic year, but for less than two academic years, the institution must calculate the student’s GPA using the grades from all coursework accepted into the student’s ACG eligible program.
o For a student who transfers to an institution that accepts less than the credit or clock hours for an academic year into the student’s ACG eligible program, the institution must calculate the student’s GPA by combining the grades from all coursework accepted into the student’s ACG eligible program with the grades for coursework earned at the current institution through the payment period in which the student completes the credit or clock hours for his or her first academic year.
• Adding a new provision to require that, for a transfer student who transfers from one institution to another institution at which the student is eligible for a National SMART Grant, the subsequent institution determines that student’s eligibility for the first payment period using one of two methods, depending on whether it incorporates the grades from the student’s previous coursework that it accepts on transfer into the student’s GPA at the subsequent institution.
• Extending eligibility for a first-academic-year ACG to any student who enrolls as a regular student in an ACG eligible program while in high school provided that the student is beyond the age of compulsory school attendance.
• Requiring an institution to document a student’s eligible major and progress in the eligible program and major by maintaining documentation, such as the following:
o Documentation of the declared major, including written declaration of intent to declare an eligible major provided by the student; and
o Written documentation showing that the student is progressing in coursework leading to a degree in the student’s intended or declared eligible major; and
o Written documentation that the student is enrolling in the courses necessary to complete a degree in the intended or declared eligible major.
• Providing a process for institutions of higher education to request additional majors to be added to the list of eligible majors for National SMART Grants.

The Federal Register notice stated that there were no significant differences between the Department of Education’s original Notice of Public Rulemaking and the final regulations resulting from public comment or legislative action.
You can view the Federal Register notice at http://www.ed.gov/legislation/FedRegister/finrule/2007-4/102907a.html.

Author: CWP

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President Signs Higher Education Reconciliation Bill

Last Thursday, President Bush signed H.R. 2669, the College Cost Reduction Act in to law (P.L. 110-84). The bill, touted by supporters as the single greatest aid bill for college students in more than a decade, passed both chambers of Congress with overwhelming bipartisan support, making the possibility of a veto unlikely. The President conceded to sign the bill, but stated that he is looking forward to working with Congress on finding offsets for the Pell grant increase and other spending commitments that are not paid for in this bill.

The College Cost Reduction Act, commissioned in the fiscal year 2008 budget resolution, provides more than $20 billion in federal aid to college students. The bill slashes federal subsidies to private loan companies and increases grants for students. It will gradually reduce interest rates on federally subsidized loans for low-income students to 3.4% over five years. The law will also offer loan forgiveness for those who have held public service jobs for 10 years and will cap payments on federal loans at a certain percentage of a college graduate's income.

Congress still has yet to complete work on reauthorizing the Higher Education Act (HEA), a bill that would build upon the efforts of the College Cost Reduction act by increasing aid to students, and setting strict standards for tuition and other policies at public universities. The Senate passed their HEA Reauthorization bill, S. 1642, buy a vote of 95-0 on August 1.

The Senate bill will:
• Increase the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Direct the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Require colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

The House currently has no draft proposals for its HEA reauthorization. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, commented that the House will not move forward on the HEA until it completes work on reauthorizing No Child Left Behind.

Resources:
Jonathan D. Glater, “President Signs Overhaul of Student Aid,” New York Times, September 28, 2007.
Ian Shapira, “Bush Signs Sweeping Student Loan Bill Into Law, Adding an Asterisk,” Washington Post, September 28, 2007.
Author: SAS

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Higher Education Data Released

Although the House Education and Labor Committee has focused solely on the discussion draft for reauthorizing No Child Left Behind (NCLB) since Congress returned to session this month, Higher Education is still the only area of Education that has already seen movement in Congress, and continues to garner much of the attention on a national scale. Last month, a report from the National Center for Education Statistics (NCES), along with various university studies and U.S. census data all focused on the number of institutions of higher education, the number of advanced degrees awarded, and the social and economic make up of those students in the U.S.

While the number of both male and female students enrolled in higher education programs rose between 2000 and 2006, a census survey found that women outpaced men in both undergraduate and graduate programs. In that period, the nation's undergraduate enrollment swelled by nearly 2.7 million students, 18.7%, but the percentage of males fell 1.2 percentage points, to 44%. Women in 2006 made up 56% of undergrads, up from 54.8% in 2000.

The NCES report, released Tuesday, shows that the number of American postsecondary institutions grew by 1.5% from fall 2005 to fall 2006, and that the number of degrees they awarded grew by 3% from academic year 2004-5 to academic year 2005-6. Almost all of the growth in the number of institutions came in the for-profit sector, although the institutions continue to educate a relatively small proportion of the overall total college population. The proportion of degrees going to women and to members of minority groups continued to edge up. Women received 57.8% of all degrees awarded by four-year institutions in 2005-6 (up from 57.4% percent in 2004-5) and 62.7% of the degrees awarded by two-year colleges, up from 62.6%. White students received 65% of the degrees awarded by four-year colleges, while 9.1% went to black students, 6.4% to Hispanic students, 6.1% percent to Asian/Pacific Islanders and 0.7% to American Indian/Alaskan Natives. The proportion awarded to people whose race or ethnicity was unknown rose to 6.9% from 6.6%, while the proportion going to nonresident aliens shrank to 5.8% from 6%.

Of those degrees, the number of Masters and other advanced degrees is also increasing. More students than ever have started masters programs this fall, and universities are seeing those programs as potentially lucrative sources of revenue. The number of students earning these degrees around the country has nearly doubled since 1980. Since 1970, the growth is 150%, more than twice as fast as bachelor and doctorate programs. For students, the degrees are often expensive; at private universities, many students take out $50,000 in loans for every year of school. Scholarships and fellowships are rare, unlike doctoral programs, which are usually fully financed by universities.

Increased enrollment, more degrees, and a higher number of institutions led Congress to begin working on reauthorizing higher education programs this year. Just last week, Congressed passed H.R. 2669, the College Cost Reduction Act, intended to increase maximum Pell Grant levels, lower interest rates on student loans, and take other various measures to increase aid to students and increase accessibility for low income students. Although the President has not signed the bill yet, he is expected to do so, despite some reservations regarding new entitlement programs authorized under the bill. The Senate has also completed work on its own reauthorization of the Higher Education Act (HEA). The House currently has not produced its own version, and House Education and Labor Committee Chairman George Miller (D-CA) said he will not move on to the HEA until the committee completes work on NCLB. However, higher education is still a top priority in Congress, and further action can be expected for next year.

Resources:
Doug Lederman, “College Capacity Grows,” Inside Higher Ed, September 12, 2007.
Greg Toppo and Anthony DeBarros, “Women Feed the Jump in College Enrollment,” USA Today, September 12, 2007.
Hannah Fairfield, “Master’s Degrees Abound as Universities and Students See a Windfall,” New York Times, September 12, 2007.
Author: SAS

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Congress Passes Higher Education Reconciliation Bill

Congressional negotiators agreed on a conference report for H.R. 2669, the College Cost Reduction Act on Wednesday, September 5. The joint budget resolution for fiscal year 2008 (FY08) called for the House and Senate Education Committees to generate $750 million for budget reconciliation, which H.R. 2669 does. Both chambers passed the conference report today. The Senate passed it by a vote of 79-12 and the House by a vote of 292 - 97.

The conference report raises the maximum value of the federal Pell Grant scholarship by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006. Roughly 5.5 million low- and moderate-income students would benefit from the increase. Additionally, the bill cuts interest rates on need-based student loans in half, from 6.8% to 3.4%, over the next four years. According to House Education and Labor Committee Chairman, once the cut is fully phased-in, it would save the typical student borrower $4,400 over the life of the loan. Chairman Miller also claims that the legislation would make loan payments more manageable for students, provide tuition assistance for undergraduate who agree to teach in high-need areas, invest in minority institutions and provide loan forgiveness for some government workers, such as military officers, police officers, firefighters and teachers.

Although the bill enjoys widespread bipartisan support, some Republicans still have reservations over the conference report. House Education and Labor Committee Ranking Member Howard "Buck" McKeon (R-CA) criticizes the fact that the $19 billion cut to subsidies for the student lending industry is not being put to effective use. McKeon and other Republicans argue that the money from the cuts could pay for greater increases in the maximum Pell Grant, an issue that generally receives the widest margin of bipartisan support.

Originally, the White House strongly opposed the House version of the bill, which created additional entitlement programs in grants for students. Despite previous veto threats, White house officials assured Congressional leaders that the president will sign the bill, and although he has some reservations regarding the interest rate cuts, public support for the bill has likely swayed the president's stance. The bill should be signed by the September 15 deadline set in the budget resolution.

Resources:
Stephen Langel, "Officials Say Bush Will Accept Deal on Higher Ed Package," Congress Now, September 6, 2007
Author: SAS

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HEA Put on Backburner for NCLB

Congress is working on two separate measures for higher education. First, both chambers have passed a Higher Education reconciliations bill, H.R. 2669, as directed in the fiscal year 2008 (FY08) joint budget resolution. That resolution instructed the House Education and Labor Committee and the Senate Health, Education, labor and Pensions (HELP) Committee to find $750 million in deficit-reducing cuts to mandatory programs that fall within the two panels' jurisdictions. The Senate also passed a reauthorization package for the Higher Education Act (HEA), which expired in 2004. Congress has passed multiple extensions over the last three years, due to a lack of consensus on reauthorization policies.

By a vote of 95-0, the Senate passed S. 1642, Higher Education Amendments, reauthorizing the Higher Education Act (HEA) on Tuesday, July 24. The unanimous vote signals the only truly bipartisan support for any legislation that has made its way to the Senate floor this year. After only two days of debate, the Senate was able to pass the bill much more quickly than usual. However, since the House has not moved forward on its own reauthorization legislation, both chambers had to pass a three-month extension of the HEA, giving the House additional time to produce its own comprehensive package.

The Senate bill, which reauthorizes higher education programs for five years, represents the first renewal of the HEA since 1998. Provisions within S. 1642 include:

• Increasing the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Directing the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Requiring colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

Before final passage, the Senate adopted Sen. Tom Coburn’s (R-OK) amendment, which bars colleges and universities from using federal funds or student aid money for lobbying, and would require schools to certify to the Education Secretary that they abide by those terms. Coburn’s original proposal also prohibited use of tuition money for lobbying purposes, but a secondary amendment from Sen. Kennedy, adopted by a 93-0 vote, removed that language from the underlying amendment, which the Senate accepted by a voice vote.

Shortly after passing S. 1642, the Senate passed a short HEA extension, to run through October 31, 2007, since the House has not made any progress on its own reauthorization. Although both chambers have passed H.R. 2669, a higher education reconciliation bill, there is no HEA reauthorization legislation for the House Education and Labor Committee to review. While Committee Chairman George Miller (D-CA) has not set out a timetable for reauthorization, he did promise that the House will eventually move forward with its own comprehensive package. Recently, Chariman Miller decided that the committee will not take up the HEA until it completes work on the No Child Left Behind reauthorization. The three-month HEA extension seems to show that the House may not move as quickly as the Senate did, especially considering that the House will not likely have any legislation completed before October.

Meanwhile, both chambers can now move forward on the reconciliation package. H.R. 2669 now goes to conference, where the leadership will have to settle the major differences between the two versions. The biggest difference is that the House bill, passed last week, halves the interest rates on subsidized student loans, from 6.8% to 3.4%. This rate cut is part of House Democrats’ “Six for ’06” agenda that Chairman Miller seems unwilling to sacrifice. While Sen. Edward Kennedy (D-MA), Senate Health, Education, Labor, and Pensions Chairman, is likely to be equally stubborn on Senate provisions, such as auctioning the right to offer federally backed PLUS loans to parents, the Senate measure has factors working in its favor. The President has already made a veto threat on the House bill, while only expressing “serious concern” with the Senate proposal. The fact that the White House has offered to negotiate with Sen. Kennedy gives Senate conferees the upper hand in negotiating with the House.

Resources:
Doug Lederman, “Unanimity in the Senate,” Inside Higher Ed, July 25, 2007.
Karey Wutkowski, “Senate Backs Crackdown on Student Loan Problems,” Reuters, July 24, 2007.
Libby George, “Kennedy Gives Higher Education Package ‘Outside Chance’ of Quick Passage,” CQ Today, July 24, 2007.
Author: SAS

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Senate Passes HEA Reauthorization

By a vote of 95-0, the Senate passed S. 1642, Higher Education Amendments, reauthorizing the Higher Education Act (HEA) on Tuesday. The unanimous vote signals the only truly bipartisan support for any legislation that has made its way to the Senate floor this year. After only two days of debate, the Senate was able to pass the bill much quicker than usual. However, since the House’s has not moved forward on their own reauthorization legislation, both chambers had to pass a three-month extension of the HEA, giving the House additional time to produce their own comprehensive package.


The Senate bill, which reauthorizes higher education programs for five years, represents the first renewal of the HEA since 1998. Provisions within S. 1642 include:
• Increasing the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Directing the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Requiring colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.
Before final passage, the Senate adopted Sen. Tom Coburn’s (R-OK) amendment, which bars colleges and universities from using federal funds or student aid money for lobbying, and would require schools to certify to the Education Secretary that they abide by those terms. Coburn’s original proposal also prohibited use of tuition money for lobbying purposes, but a secondary amendment from Sen. Kennedy, adopted by a 93-0 vote, removed that language from the underlying amendment, which the Senate accepted by a voice vote.
Shortly after passing S. 1642, the Senate passed a short HEA extension, to run through October 31, 2007 since the House has not made any progress on their own reauthorization. Although both chambers have passed H.R. 2669, a higher education reconciliation bill, there is no legislation for the House Education and Labor Committee to review. While Committee Chairman George Miller (D-CA) has not set out a timetable for reauthorization, he did promise that the House will eventually move forward with its own comprehensive package. The three-month extension seems to show that the House may not move as quickly as the Senate did, especially considering that the House will not likely have any legislation completed before the month-long August recess.
Meanwhile, both chambers can now move forward on the reconciliation package. H.R. 2669 now goes to conference, where the leadership will have to settle the major differences between the two versions. The biggest difference is that the House bill, passed last week, halves the interest rates on subsidized student loans, from 6.8% to 3.4%. This rate cut is part of House Democrats’ “Six for ’06” agenda that Chairman Miller seems unwilling to sacrifice. While Sen. Edward Kennedy (D-MA), Senate Health, Education, Labor, and Pensions Chairman, is likely to be equally stubborn on Senate provisions, such as auctioning the right to offer federally backed PLUS loans to parents, the Senate measure has factors working in its favor. The President has already made a veto threat on the House bill, while only expressing “serious concern” with the Senate proposal. The fact that the White House has offered to negotiate with Sen. Kennedy gives Senate conferees the upper hand in negotiating with the House.
Resources:
Doug Lederman, “Unanimity in the Senate,” Inside Higher Ed, July 25, 2007.
Karey Wutkowski, “Senate Backs Crackdown on Student Loan Problems,” Reuters, July 24, 2007.
Libby George, “Kennedy Gives Higher Education Package ‘Outside Chance’ of Quick Passage,” CQ Today, July 24, 2007.
Author: SAS

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Senate Passes Higher Ed Reconciliation Bill

Just before 1:00 AM on Friday, July 20, the Senate passed H.R. 2669, the College Cost Reduction Act, by a vote of 78-18. The bill, which cuts more than $18 billion in subsidies to student lenders, passed with no substantial amendments. The House passed its companion bill last week, with a slightly larger cut, so the bill now heads to conference. The main hurdle in the Senate centered on an amendment that would reduce the cuts by about $3 billion.

Sens. Richard M. Burr (R-NC) and Ben Nelson (D-NE) offered an amendment that would wipe out $2.4 billion of the lender subsidy cuts proposed in H.R. 2669, most of which would be redirected to aid student borrowers. The Senators argued, and some opponents conceded, that Congress could not be certain that the subsidy cuts would not force certain lenders out of the industry. Rather than take that chance, the two Senators felt the more prudent course of action would be to scale back the proposed cuts.

However, Sen. Edward Kennedy (D-MA), the bill’s sponsor, claimed the amendment would cut the $800-per-person Pell grant increase down to a $300 increase or less. The amendment would call for the difference to be made up using appropriations, but Sen. Kennedy pointed out that this is not a reliable approach because there is no requirement that these funds be provided. The amendment was defeated 61-36.

The bill now goes to conference, where reconciliation between the major differences will prove challenging for negotiators. The biggest difference is in the House bill, passed last week, which halves the interest rates on subsidized student loans, from 6.8% to 3.4%. This rate cut is part of House Democrats’ “Six for ’06” agenda that House Education and Labor Chairman George Miller (D-CA) seems unwilling to sacrifice.

While Sen. Kennedy is likely to be equally stubborn on Senate provisions, such as auctioning the right to offer federally backed PLUS loans to parents, the Senate measure has factors working in its favor. The President has already offered a veto threat on the House bill, while only expressing “serious concern” with the Senate bill. The fact that the White House has not threatened the Senate version, and in fact has offered to negotiate, gives Senate conferees the upper hand in negotiating with the House.

Resources:
Doug Lederman, "Senators Side With Students," Inside Higher Ed, July 20, 2007.
Libby George, “Private Lender Subsidy Cuts Hold Up,” CQ Today, July 20, 2007.
Stephen Langel, “Education Bill Overwhelmingly Passes Senate,” Congress Now, July 20, 2007.
Author: SAS

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House Passes Higher Education Reconciliation Bill

On Wednesday, July 11, the House passed H.R. 2669, the College Cost Reduction Act, by a vote of 273 to 149. The reconciliation bill, mandated in the fiscal year 2008 joint budget resolution, cuts $19 billion in federal subsidies to student lenders over five years, while increasing grants for needy students and halving interest rates on federally backed loans with the savings. The bill would also create nine new entitlement programs, including grants for students who become public school teachers, loan forgiveness for certain public-sector employees, income-contingent loan repayment, grants for certain minority-serving institutions and matching grants for companies’ philanthropic efforts to improve college access and retention. Democrats and Republicans engaged in impassioned debates over the entitlement programs and subsidy cuts over the course of two hours on the House floor.

After debating the underlying bill, which increases the maximum Pell grant to $5,200 over five years, cuts interest rates on subsidized student loans in half to 3.4 percent and increases the federally backed loan limit for undergraduate studies by $7,500, to $30,500, Rep. Howard “Buck” McKeon (R-CA), the ranking Republican on the House Education and Labor Committee, brought a substitute amendment up for debate. The substitute would have reduced subsidies in the loan programs and invested most savings in the Pell Grant program by providing increases of $350 in 2008 and $100 each year thereafter. After sixty minutes of heated discussion, the amendment was defeated, 189-231.

“This bill is disguised to reduce the federal deficit, but it creates nine new entitlement programs,” Rep. McKeon stated. Citing a cost of $32 billion after five years, Rep. McKeon noted that President Bush has pledged to veto the bill as it stands. However, the Bush administration proposed cutting lender subsidies earlier this year, so there is still a small chance the bill may become law. In the time it takes for the Senate to pass their version of the bill and go to conference, Congressional leaders have ample time to reach an agreement over the entitlements.

Resources:
Jennifer Bendery, “House Passes Student Aid Bill, Despite White House Veto Threat,” Congress Now, July 11, 2007.
Diana Jean Shemo, “House Passes Overhaul Plan on Student Aid,” New York Times, July 12, 2007.
Author: DAD, SAS

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Congress Passes HEA Extension

On Wednesday, June 27, the Senate passed S. 1704, a 30-day extension for the Higher Education Act (HEA), which is set to expire on Saturday. The House, which had passed its own four-month extension earlier this session, followed suit and passed the Senate extension so the bill can go to President Bush before the Saturday deadline. The extension will run through July 31, 2007. Considering the week-long recess next week, this leaves Congress with less than a month to complete work on the HEA reauthorization.

Last week, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously passed its HEA bill. The Senate bill, S. 1642, increases the amount of information that schools and lenders must provide students about their loans. The bill will also ban lenders from providing school financial aid officials with perks such as student aid assistance in order to be on schools’ “preferred lender” lists. The measure would shorten the form that students must complete for financial aid and would direct the U.S. Department of Education (ED) to track tuition increases and assess the drivers behind increasing college costs, putting schools on notice that the government is concerned about rapid tuition increases. The Senate has not scheduled time for a floor debate for the reauthorization, and the House Education and Labor Committee has not marked up its own reauthorization, so there is still a lot of work to do.
Although the House has not moved on to HEA reauthorization, both Congressional panels passed a higher education reconciliation bill, as directed by the joint budget resolution Congress passed in May. The Senate bill cuts federal subsidies to lending companies by as much as $19 billion. The bill will channel most of those savings to student aid and ease repayment rules for borrowers. It also creates a new entitlement funding stream for Pell grants that would not be subject to the annual appropriations process. The bill intends to boost the maximum Pell grant by more than $1,000, to $5,400 by 2011. The bill would establish new "Promise Grants" for the neediest Pell recipients, cap student loan repayments at 15% of discretionary income and offer loan forgiveness for some public-service employees. The House passed a similar measure earlier this month, though neither chamber has considered their bills on their respective floors.
Resources:
Libby George, “House Clears Temporary Extension of College Aid Law,” CQ Today, June 28, 2007.
Author: SAS

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HELP Committee Passes HEA and Reconciliation Bills

On Wednesday, June 20, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously passed S. 1642, reauthorizing the Higher Education Act (HEA). As expected, following the various reports on scandals in the student lending industry, the HEA reauthorization focuses on student lending and college affordability by setting stricter regulations on relationships between schools and lenders, as well as increasing the maximum Pell grant awards and expanding grant assistance opportunities. The HELP Committee also passed a reconciliation bill, as directed by the joint budget resolution for fiscal year 2008 (FY08), by a vote of 17-3.

On Wednesday, June 20, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously passed S. 1642, reauthorizing the Higher Education Act (HEA). As expected, following the various reports on scandals in the student lending industry, the HEA reauthorization focuses on student lending and college affordability by setting stricter regulations on relationships between schools and lenders, as well as increasing the maximum Pell grant awards and expanding grant assistance opportunities. The HELP Committee also passed a reconciliation bill, as directed by the joint budget resolution for fiscal year 2008 (FY08), by a vote of 17-3.
The new HEA increases the amount of information that schools and lenders must provide students about their loans. The bill will also ban lenders from providing school financial aid officials with perks such as student aid assistance in order to be on schools’ “preferred lender” lists. The measure would shorten the form that students must complete for financial aid and would direct the U.S. Department of Education (ED) to track tuition increases and assess the drivers behind increasing college costs, putting schools on notice that the government is concerned about rapid tuition increases.
The 67-page reconciliation bill cuts federal subsidies to lending companies by as much as $19 billion. The bill will channel most of those savings to student aid and ease repayment rules for borrowers. It also creates a new entitlement funding stream for Pell grants that would not be subject to the annual appropriations process. It is intended to boost the maximum Pell grant by more than $1,000, to $5,400 by 2011. The bill would establish new "Promise Grants" for the neediest Pell recipients, cap student loan repayments at 15% of discretionary income and offer loan forgiveness for some public-service employees.
The three Senators to vote against the measure, Judd Gregg (R-NH), Richard Burr (R-NC), and Wayne Allard (R-CO), criticized the committee for using the budget reconciliation process to pass provisions that should have been placed in the HEA reauthorization. Reconciliation bills are not subject to filibuster in the Senate, thereby acting as a better vehicle for passing controversial pieces of legislation that are not likely to get minority support. However, the three dissenters on the committee seemed more opposed to the process through which the bill is being considered, and less concerned with the provisions within the bill itself, though they claim the bill will cost more in Pell increases then it will save in subsidy cuts.
The subsidy cuts largely track those proposed by President Bush in his 2008 budget and included in a House bill, H.R. 2669, approved by the Education and Labor Committee on June 13. The House bill, however, also includes provisions that would halve the interest rate on subsidized student loans over five years and boost the maximum Pell grant by $500. Once the two bills pass through their respective chambers, Congressional leaders expect a quick conference. As of this point, the House Education and Labor Committee has not scheduled its own HEA markup.
Resources:
Alex Wayne, “Committee Approves Pair of Bills Designed to Overhaul Financial Aid System,” CQ Today, June 20, 2007.
Stephen Langel, “Higher Education Act, Controversial Reconciliation Provision Head to Senate Floor,” Congress Now, June 20, 2007.
Doug Lederman, “Students’ Gain, Lender’s’ Pain,” Inside Higher Ed, June 21, 2007.
Amit R. Paley, “Student Loan Overhaul Advances,” Washington Post, June 21,2007.
Author: SAS

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