Audit Report Questioning Fiscal Flexibility in Schoolwide Programs

On June 20, 2007, the U.S. Department of Education’s Office of Inspector General (OIG) released a blockbuster audit report questioning long-standing guidance on the way states and school districts should document financial information in schoolwide programs. The audit is available on the U.S. Department of Education’s (ED) website at: http://www.ed.gov/about/offices/list/oig/auditreports/a05g0031.pdf

OIG audited a school district to determine if the district complied with financial accountability requirements under the No Child Left Behind Act (NCLB) programs. The objective of the audit was to determine if costs were allowable under the program, necessary, reasonable, allocable and spent in accordance with approved budgets. During the audit, OIG concluded the district did not provide appropriate time and effort records showing how much time employees spent on various cost objectives. Some of these employees worked on schoolwide activities in schoolwide programs.
The State (which is ultimately responsible for audit resolution in state-administered programs) objected, noting that funds lose their character as state or federal funds in schoolwide programs. Therefore, it would not make sense to require schoolwide employees to maintain documentation of their time and effort. The state pointed to ED’s Non-Regulatory Guidance on Designing Schoolwide Programs (March 2006), which states:
Schoolwide program schools use Title I funds to meet the needs of all students in the school, as determined through a comprehensive needs assessment. Individual students are not identified as eligible to participate. No distinctions are made between staff paid with Title I funds and staff who are not.
The State argued that if there is no distinction between staff supported with federal funds and staff that are not, it does not make sense to require employees to keep documentation of which programs they work on.
OIG rejected this argument, noting the schoolwide schools did not actually consolidate their funding in their accounting systems. The OIG states that “funds were accounted for in the same way whether or not the individual was employed by a schoolwide or non-schoolwide school.” Without evidence that the school district used an accounting method to consolidate schoolwide program funds at its schoolwide schools, OIG found no basis to distinguish between schoolwide and non-schoolwide costs.
OIG questioned $210,000, but estimated the total amount of unsupported costs might be as high as $2,360,000. OIG recommended that ED’s Office of Elementary and Secondary Education determine the full amount of unsupported costs and require the State to repay that amount.
This audit report highlights longstanding confusion over the extent of fiscal flexibility available in a schoolwide school. Although ED has encouraged schoolwide schools to “consolidate” their funding (and, in fact, NCLB requires states to lift all barriers to the consolidation of schoolwide funds and to encourage school districts to consolidate schoolwide funding), it has never provided clearly written guidance on what consolidation means. In May 2006, ED released Non-Regulatory Guidance on Title I Fiscal Issues attempting to clarify the consolidation requirement by introducing the notion of a “single account.” The guidance provides:
A school operating a schoolwide program that consolidates in a single account and uses, in a schoolwide program, funds from other Federal education programs administered by the Secretary (except Reading First) is not required to maintain separate fiscal accounting records, by program, that identify the specific activities supported by those program funds. The school must, however, maintain records that demonstrate that the schoolwide program, considered as a whole, addresses the intent and purposes of each of the Federal education programs whose funds were consolidated to support it.
From the start, however, this guidance raised more questions than it answered because it never explained what a “single account” is, or what steps a school must take in order to consolidate funds into a single account.
ED has been particularly inconsistent in how it treats time distribution in schoolwide programs. In guidance issued under the Improving America’s Schools Act of 1994, the predecessor to NCLB, ED stated that employees working exclusively on schoolwide activities do not need to maintain any time and effort records. This guidance was written by ED’s Office of Elementary and Secondary and Education. Yet, ED’s Office of the Chief Financial Officer (OCFO) later advised that a schoolwide program represents a single cost objective; accordingly, semi-annual certifications must be kept. The OCFO’s position was also reflected in the OMB Circular A-133 Compliance Supplement. This conflict was supposed to be clarified by ED’s May 2006 fiscal guidance, in which ED stated that schoolwide schools consolidating their funds into a single account are not required to maintain any time and effort records, while schools not consolidating their funds into a single account must follow the rules of time distribution set out in OMB Circular A-87. Without an explanation of what a “single account” is, it is difficult to understand the practical implications of this guidance. Further, it remains unclear whether a schoolwide program constitutes a “single cost objective” if a school does not consolidate its funds into a single account.
This audit finding may finally force a confrontation over what it means to consolidate funds in a schoolwide program and what practical implications that has for financial operations. Although the finding only specifically addresses time and effort certification, this issue impacts the documentation of any costs associated with a schoolwide program, as well as other financial management issues such as procurement, inventory management, cash management and record keeping. Ultimately, it is up to ED’s Office of Elementary and Secondary Education to determine whether to sustain the audit findings.
This audit also underscores ED’s overall focus on fiscal issues. It is our understanding that OIG is performing a number of financial accountability audits around the country.
Our firm has contacted the OIG and OCFO to get clarification on the policy interpretations underlying this audit report. We plan to address the issue of consolidated funding in a schoolwide program in great detail at trainings this fall, including AEFFA in October and our Forum in November. We will keep you posted on any additional information we receive from ED on this very important issue.
Author: SLK

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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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More Focus on Internal Controls in OMB Circular A-133 Revision

The Office of Management and Budget (OMB) published a revision to OMB Circular A–133 “Audits of States, Local Governments, and Non-Profit Organizations” in Tuesday’s (6/26/07)Federal Register. The revision updates terminology and definitions related to internal controls and simplifies reporting requirements to the Federal Audit Clearinghouse (FAC).

The revisions to the internal control terminology align OMB Circular A-133 standards with changes in the Statement on Auditing Standards issued by the American Institute of Certified Public Accountants (AICPA) and the Government Accountability Office’s revisions to Government Auditing Standards. Rather than requiring auditors to identify reportable conditions over internal controls, the revised OMB Circular A-133 will require auditors to classify findings as a “control deficiency,” “significant deficiency” or “material weakness.” The definition of each of these categories is available at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-12320.pdf. In addition, OMB announced the release of AICPA Auditing Interpretation No. 1 of Statement on Accounting Standard No. 112, entitled “Communicating Deficiencies in Internal Control Over Compliances in an Office of Management and Budget Circular A-133 Audit.” The Interpretation is available at: www.aicpa.org.
Starting on January 1, 2007, the auditee is no longer required to submit multiple copies of the reporting package to the FAC. Instead, only one copy is necessary, except for Part III, item 8, which states that all required agencies receive a copy of the package.
As a practical matter, these revisions may lead to an increase in the number of internal control findings reported in single audits. They may also change how auditors determine which programs to audit and how to determine an auditee’s overall risk-level. This could have a significant impact on recipients of federal education grants. As we have previously reported, the U.S. Department of Education (ED) has become increasingly concerned about managing risk levels in state and local education agencies. It has developed a scorecard to assess risk levels across the country and has begun to visit states to discuss risk mitigation strategies. Ultimately, ED plans to use its assessments to determine who to monitor when, and how closely to scrutinize state and local practices. Although we do not know precisely what criteria ED uses as part of its risk determination, ED officials have stated they review single audit findings – especially findings related to internal controls.
These revisions apply to audits of fiscal years ending on or after December 15, 2006. OMB invites interested parties to submit comments by August 27, 2007. Instructions for submitting comments are available at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-12320.pdf.
Author: TRW, SLK

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Senate Passes Head Start Reauthorization

On Tuesday, June 19, the Senate passed an amended version of H.R. 1429, the Head Start for School Readiness Act. The amended measure resembles S. 556, the Head Start bill that passed the Senate Health, Education, Labor and Pensions (HELP) Committee earlier this year by unanimous consent. The bill now heads to conference with the House to reconcile differences. Head Start was last authorized in 1998 and has been in the reauthorization pipeline since 2003. Unable to complete the reauthorization, Congress has continually extended the law since 2003.

On Tuesday, June 19, the Senate passed an amended version of H.R. 1429, the Head Start for School Readiness Act. The amended measure resembles S. 556, the Head Start bill that passed the Senate Health, Education, Labor and Pensions (HELP) Committee earlier this year by unanimous consent. The bill now heads to conference with the House to reconcile differences. Head Start was last authorized in 1998 and has been in the reauthorization pipeline since 2003. Unable to complete the reauthorization, Congress has continually extended the law since 2003.

The Senate bill increases funding to expand the Head Start program, authorizing $7.3 billion in fiscal year 2008 (FY08), $400 million more than was provided this year. The bill increases funding to $7.5 billion in FY09 and $7.9 billion in FY2010. Unlike the House bill, the Senate measure would provide $100 million for a new state incentive grant program, a priority of HELP committee chairman Sen. Edward Kennedy (D-MA), which will implement state early care and education plans. The Senate bill also would more broadly expand Head Start eligibility by increasing the minimum income level required for participation to 130% above the Federal Poverty Line.

The Senate bill also:
• Doubles the Early Head Start set-aside (currently 10%; would phase up to 20% over 5 years);
• Ensures funds for Indian Head Start (4% minimum set-aside) and Migrant and Seasonal Head Start (5% minimum set-aside);
• Supports Head Start programs in aligning standards and services with state early learning standards;
• Suspends and terminates the flawed Head Start National Reporting System;
• Supports the National Academy of Sciences review of child outcomes and assessments, based on gold-standard research;
• Dedicates 1% of total Head Start funds to Head Start grantees, for local training and technical assistance efforts;
• Establishes new goals (no requirements or penalties) for the Head Start teaching workforce:
o All Head Start teachers nationwide must have an Associate’s degree in 5 years;
o Half of all teachers in each state must have a Bachelor’s degree in 6 years;
o All Head Start curriculum specialists must have at least a Bachelor’s degree in 5 years; and
o All Head Start assistant teachers must have at least a child development associate credential in 5 years.
• Creates a new State Advisory Council on Early Care and Education in every state; and
• Recognizes and awards bonuses to “Centers of Excellence” that provide exemplary services to Head Start children and families. (New authorization of $90 million).
No date is set for the beginning of the conference, but the Senate has designated all 21 HELP Committee members as conferees. No House conferees have been designated yet.
Resources:
Kathleen Hunter, “Senate Passes Head Start Reauthorization; Moves to Go to Conference With House,” CQ Today, June 19, 2007.
Senator Kennedy Press Release: http://help.senate.gov/Maj_press/2007_06_20_d.pdf
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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Senate Committee Passes FY08 Appropriations Bill

Last Thursday, the Senate Appropriations Committee approved the fiscal year 2008 (FY08) Labor-HHS-Education Appropriations bill. The Senate bill allocates more than $152 billion for the Departments of Labor, Health and Human Services, and Education, $9 billion more than the President requested, and about $1 billion less than the House Subcommittee allocated two weeks ago (including advanced appropriations). This increase makes up a large chunk of the $20 billion difference between the spending caps set in the joint budget resolution, and the President’s total request for FY08. The U.S. Department of Education (ED) received over $60 billion, about $1 billion less than the House bill.

Last Thursday, the Senate Appropriations Committee approved the fiscal year 2008 (FY08) Labor-HHS-Education Appropriations bill. The Senate bill allocates more than $152 billion for the Departments of Labor, Health and Human Services, and Education, $9 billion more than the President requested, and about $1 billion less than the House Subcommittee allocated two weeks ago (including advanced appropriations). This increase makes up a large chunk of the $20 billion difference between the spending caps set in the joint budget resolution, and the President’s total request for FY08. The U.S. Department of Education (ED) received over $60 billion, about $1 billion less than the House bill.
Although most programs, such as Title I State Grants and IDEA Part B State Grants, received increases over the FY07 levels, programs such as Career and Technical Education State Grants, Teacher Quality State Grants, and Education Technology State Grants received level funding. The only two programs to receive funding cuts are Reading First ($229 million less than FY07) and Safe and Drug Free Schools State Grants ($46.5 million less than FY07). Although both chambers are proposing these cuts, the House bill cuts Reading First by $629 million. Both chambers are reacting to the accusations of mismanagement of the Reading First program that has plagued ED this year.
The House Labor-HHS-Education Appropriations Subcommittee marked up its bill two weeks ago, but disagreements over earmarks forced House appropriators to move their timetable back, pushing the bill back until after the July 4th Recess. House Majority Leader Steny Hoyer (D-MD) reluctantly backed off from his promise to have all 12 FY08 spending bills passed before the recess, in light of the earmark challenges. All spending bills in the House will have the special spending projects adopted into the bill before they hit the House floor, forcing the Appropriations Committee to extend the deadlines for each bill.
There is currently no finalized schedule for when the Senate will bring its spending bills to the floor, but the delays in the House will likely push the final votes on conference reports back until after the month-long August recess. That will leave Congress only one month to complete all spending bills before October 1, the beginning of FY08, as many members promised during the 2006 midterm elections. An additional challenge is the White House’s threat to veto all appropriations bills that far exceed the President’s request. The total spending cap set in the joint budget resolution is about $20 billion more than the President requested.
The White House has signaled that the President will allow for some increases, but that his tolerance is limited. The consensus on Capitol Hill is that the President may sign off on only $7 billion or $8 billion total over his entire request. If that level is reached before the Labor-HHS-Education bill makes it to the President’s desk, its chances of success are unlikely. House Republicans recently released a letter showing they have 147 Congressmen signed on to sustain any Presidential veto (only 145 votes are required). Appropriators likely have until September to reach a compromise on the spending levels, or convince a sufficient number of those 147 Republicans to back off of their stated opposition. Otherwise, the only other option will be to pass an omnibus package, likely after the October 1 deadline passes, that funds too many important programs for the President to risk the political fallout of a veto.
A chart of the Senate funding levels is attached to this email.
Resources:
Appropriations Committee Press Release: http://appropriations.senate.gov/
Author: SAS

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NCLB Negotiations

On Monday, Secretary Spellings continued her charm offensive for the reauthorization for the No Child Left Behind Act (NCLB). She met with the “Big 4” in the Dirksen Senate Office Building, including Senator Edward Kennedy (D-MA), ranking member Mike Enzi (R-WY), Representative George Miller (D-CA) and ranking member Howard McKeon (R-CA). According to the Washington education intelligentsia, Secretary Spellings continued to advocate for the Administration’s Blueprint, with particular emphasis on the core principles, including:

On Monday, Secretary Spellings continued her charm offensive for the reauthorization for the No Child Left Behind Act (NCLB). She met with the “Big 4” in the Dirksen Senate Office Building, including Senator Edward Kennedy (D-MA), ranking member Mike Enzi (R-WY), Representative George Miller (D-CA) and ranking member Howard McKeon (R-CA). According to the Washington education intelligentsia, Secretary Spellings continued to advocate for the Administration’s Blueprint, with particular emphasis on the core principles, including:
• All students reading and doing math at or above grade level by 2014;
• Annual assessments and disaggregation of data to close the achievement gap;
• Qualified teachers in core academic subjects in every classroom; and
• Timely information and options for all parents.
The Blueprint advocacy was expected, but it was the unexpected apple-shaped cookies with “NCLB ASAP” icing that won the day. Conversation, we are told, was chirpy but even the cookies may not have impacted political equation. Both parties are in the process of defining themselves for the rapidly coming 2008 elections. The Republican leadership is coalescing around more state based autonomy and their pre-NCLB principles. The Democratic leadership is working to secure a united and effective voting record, showing that they are not a “do-nothing” Congress as many coined their predecessors in the 109th Congress. Neither trend bode well for the bipartisan coalition required to amend and reauthorize the law.
Meanwhile, the House and Senate education committee staff are sifting through the more than 130 NCLB recommendations, vetting their priorities and trying to craft language that strikes a workable balance between greater state autonomy and improved technical accountability requirements, which may take longer than they hoped.
Resources:
Building on Results: A Blueprint for Strengthening the No Child Left Behind Act (U.S. Department of Education: January 2007), http://www.ed.gov/policy/elsec/leg/nclb/buildingonresults.html

Next time you are in Washington, DC and visiting us in Georgetown, try Furin’s iced cookies. If reauthorization occurs in 2007, these cookies may be the reason, http://www.furins.com/catering_desserts.html.
Author: DAD

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House Committee Passes Student Loan Bill

The House Education and Labor committee voted 30-16 on Wednesday to pass H.R. 2669, the College Cost Reduction Act. The bill will reduce federal subsidies to college loan lenders by $19 billion over five years and transfer $18 billion of the savings to financial aid programs geared toward making college more affordable to students. It would direct $750 million in savings to deficit reduction, as required by the Fiscal Year 2008 budget resolution’s reconciliation instructions. This is the latest in a series of actions regarding student loans and college affordability, though it remains unclear whether the bill signals more momentum for eventual reauthorization of the Higher Education Act, which Congress just extended last week to run through October 1st.

The House Education and Labor committee voted 30-16 on Wednesday to pass H.R. 2669, the College Cost Reduction Act. The bill will reduce federal subsidies to college loan lenders by $19 billion over five years and transfer $18 billion of the savings to financial aid programs geared toward making college more affordable to students. It would direct $750 million in savings to deficit reduction, as required by the Fiscal Year 2008 budget resolution’s reconciliation instructions. This is the latest in a series of actions regarding student loans and college affordability, though it remains unclear whether the bill signals more momentum for eventual reauthorization of the Higher Education Act, which Congress just extended last week to run through October 1st.
While the bill attempts to help students and graduates, the bill also aims to help students by enforcing changes on the very institutions they attend. The legislation requires significantly more reporting by colleges about their prices and their performance, including data on completion rates and faculty/student ratios. The bill also puts in place a series of steps institutions would have to go through if they increase tuition significantly, along with some provisions aimed at discouraging such increases. Universities have consistently opposed this provision, claiming that “price controls” always prove to be poor public policy.
Another opponent to the legislation, the student loan industry, claims that the new bill will almost immediately make higher education less affordable for middle and low class families. The proposed cuts to lender subsidies will be passed onto the families in the form of increased loan costs. Another possible consequence is that with loans being unprofitable for a majority of lenders, many private companies will simply leave the student lending field, lowering options and competition, which is usually a driving force behind lowering costs.
Although the bill obviously garnered some bipartisan support, Republicans argued that the bill, which spends $5 billion to increase the maximum Pell Grant by $500 over five years, shortchanges needy students. They proposed, somewhat uncharacteristically, to double the Democrats’ increase on Pell grants. The majority of the increased spending in the Democrats’ bill goes towards cutting student loan interest rates. Rep. Howard “Buck” McKeon (R-CA), the ranking Republican on the committee, suggested that the Republican proposal is more in line with the Democrats’ stated aims of helping students than their own proposal, which focuses much of its attention on cutting loan payments for borrowers after they’ve left college, rather the helping current students pay of college. McKeon used the same argument when Congress passed H.R. 5, which cut student loan interest rates, earlier this session.
However, the biggest Republican opposition centered on the fact that the spending increases are set to come in the form of mandatory spending, rather than the traditional discretionary spending reserved for these types of programs. Republicans argue that Democrats are simply creating new entitlements that help college graduates, rather than shifting discretionary priorities to help current students.
Overall, the bill will:
• Increase the maximum Pell Grant to $5,200 by 2001-12 (at a cost of $5 billion).
• Cut the interest rate on federally subsidized student loans in half, to 3.4 percent, by 2012-13. (Total cost: $6 billion.)
• Institute a system of “income-based repayment” for borrowers, in which their student loan payments would be capped at a manageable percentage of their income and their debt canceled after 20 years of repayment.
• Raise the amount that working students can earn — through the “income protection allowance” — without reducing their financial aid awards.
• Lift the annual and aggregate limits on how much individual students can borrow from the federal loan programs, with the goal of reducing borrowers’ dependence on private (and typically more expensive) loans.
• Forgive up to $5,000 in loans, and otherwise easing the loan repayment burden, for students who enter public service fields and fulfill other national needs.
• Create a new grant program for students who are planning to be teachers.
• Create a new program ($500 million over five years) for institutions that serve large numbers of Hispanic, American Indian and other minority students. This new provision, added to the legislation very late in the game, just before committee members voted on it, would allow for the provision of funds to “predominantly black” institutions — those that meet a variety of standards, including having at least 40 percent of their enrolled students be black.
Resources:
Doug Lederman, “The Competition to Aid Students,” Inside Higher Ed, June 14, 2007.
Patti Mohr, “Panel Advances Student Loan Reforms,” Education Daily, June 15, 2007.
Author: SAS

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