hea reauthorization: looking for direction
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HEA Reauthorization: Looking for Direction. 2005 MASFAP Fall Conference The Lodge of the Four Seasons Presenter: Laurie Wolf Des Moines Area Community College. Higher Education Act of 1965. - PowerPoint PPT PresentationTRANSCRIPT
HEA Reauthorization: Looking for Direction
2005 MASFAP Fall ConferenceThe Lodge of the Four SeasonsPresenter: Laurie Wolf
Des Moines Area Community College
Higher Education Act of 1965Higher Education Act of 1965
““An Act to strengthen the educational An Act to strengthen the educational resources of our colleges and universities resources of our colleges and universities
and to provide financial assistance for and to provide financial assistance for students in postsecondary and higher students in postsecondary and higher
education.”education.”
Lyndon B. JohnsonLyndon B. Johnson
January 4, 1965January 4, 1965
Time LineTime Line
2000 200520042003 2006
EnvironmentEnvironment
WarWar EconomyEconomy
Budget CutsBudget Cuts ‘‘No Child Left Behind’ ThemesNo Child Left Behind’ Themes
AccessibilityAccessibility
AffordabilityAffordability
AccountabilityAccountability
QualityQuality
Environment Environment (cont.)(cont.)
Supreme Court AppointmentsSupreme Court Appointments Hurricane KatrinaHurricane Katrina Hurricane RitaHurricane Rita Legislator ScandalsLegislator Scandals
Partisanship
Activity to DateActivity to Date
NASFAA recommendationsNASFAA recommendations HearingsHearings Testimony to CommitteesTestimony to Committees White PapersWhite Papers Introduction of BillsIntroduction of Bills HELP Committees Bills ApprovedHELP Committees Bills Approved
House Markup (H.R. 609) – July 22House Markup (H.R. 609) – July 22 Senate Markup (S. 1614) – September 8Senate Markup (S. 1614) – September 8
Three month extensionThree month extension
Normal Next StepsNormal Next Steps
Floor Consideration – HouseFloor Consideration – House Floor Consideration – SenateFloor Consideration – Senate Conference CommitteesConference Committees Review and Debate of Conference ReportReview and Debate of Conference Report Send to the President for ApprovalSend to the President for Approval Regulatory Process/Negotiated RulemakingRegulatory Process/Negotiated Rulemaking
What’s in the Bills?
Pell GrantPell Grant
HOUSEHOUSE Increase max awards to Increase max awards to
$6,000 for 2006-07$6,000 for 2006-07 Year-round GrantsYear-round Grants 18 semester eligibility18 semester eligibility Repeals Pell Grant Repeals Pell Grant
“tuition sensitivity” “tuition sensitivity” requirementrequirement
SENATESENATE Decreases max award to Decreases max award to
$5,100 for 2006-07; $5,100 for 2006-07; provides for a $300 per provides for a $300 per year increase for the year increase for the next four years.next four years.
Year-round GrantsYear-round Grants 18 semester limit18 semester limit
Current law: The authorized maximum award for 2003-04 was $5,800.
New Grant Program ProposalsNew Grant Program Proposals
HOUSEHOUSE Creates enhances Pell Creates enhances Pell
Grants PlusGrants Plus Achievement Grants for Achievement Grants for
State Scholars program that State Scholars program that would provide a $1,000 would provide a $1,000 bonus for Pell Grant eligible bonus for Pell Grant eligible students who participate in students who participate in the “State Scholars” the “State Scholars” program of study in high program of study in high school.school.
SENATESENATE Establishes Provisional Establishes Provisional
Grant Assistance Grant Assistance Program (ProGAP) Program (ProGAP)
Provides additional grants to Provides additional grants to Pell eligible students.Pell eligible students.
New Grant Program Proposals (cont.)New Grant Program Proposals (cont.)
HOUSEHOUSE Math & Science Honors Math & Science Honors
ScholarshipsScholarships
Competitive awards to Competitive awards to students pursuing BA, students pursuing BA, MA, PhD in science and MA, PhD in science and engineering.engineering.
Loan forgiveness Loan forgiveness
SENATESENATE National SMART GrantsNational SMART Grants
Provide up to $1,500 per Provide up to $1,500 per year to Pell eligible students year to Pell eligible students in their third or fourth year in their third or fourth year of study, who are majoring of study, who are majoring in math, science, in math, science, engineering, or a foreign engineering, or a foreign language critical to national language critical to national security.security.
Campus Based Aid ProgramsCampus Based Aid Programs
HOUSEHOUSE FormulaFormula Phases out base guarantees Phases out base guarantees
and creates “fair share” and creates “fair share” allocation process over 10 allocation process over 10 yearsyears
SEOGSEOG Authorizes $799M for Authorizes $799M for
FY2006, and such funds as FY2006, and such funds as may be necessary for may be necessary for succeeding five yearssucceeding five years
SENATESENATE FormulaFormula Maintains current allocation Maintains current allocation
formulaformula
SEOGSEOG Authorizes such funds as Authorizes such funds as
may be necessary for FY06 may be necessary for FY06 and succeeding five fiscal and succeeding five fiscal yearsyears
Campus Based Aid Programs (cont.)Campus Based Aid Programs (cont.)
HOUSEHOUSE Work-StudyWork-Study Authorizes $1B for FY2006, and Authorizes $1B for FY2006, and
such funds as may be necessary such funds as may be necessary for succeeding five yearsfor succeeding five years
Perkins LoanPerkins Loan Authorizes $250M for FY2006, Authorizes $250M for FY2006,
and such funds as may be and such funds as may be necessary for succeeding five necessary for succeeding five yearsyears
SENATESENATE Work-StudyWork-Study Provides waiver for 7% Provides waiver for 7%
community service requirementcommunity service requirement
Authorizes such funds as may be Authorizes such funds as may be necessary for FY06 and necessary for FY06 and succeeding five fiscal yearssucceeding five fiscal years
Perkins LoanPerkins Loan Authorizes such funds as may be Authorizes such funds as may be
necessary for FY06 and necessary for FY06 and succeeding five fiscal yearssucceeding five fiscal years
Perkins Loan ProgramPerkins Loan Program
HOUSEHOUSE Increase annual limits:Increase annual limits:
Undergraduates: $5,000Undergraduates: $5,000 Graduates: $8,000Graduates: $8,000 Increases aggregate Increases aggregate
limit:limit: Undergraduate: $27,500Undergraduate: $27,500 Graduate: $60,000Graduate: $60,000
SENATESENATE Maintains current lawMaintains current law
Stafford Loan ProgramStafford Loan Program
HOUSEHOUSE
Borrowing LimitsBorrowing Limits Increases undergraduate Increases undergraduate
annual limits:annual limits: 11stst year: $3,500 year: $3,500 22ndnd year: $4,500 year: $4,500
Increases unsubsidized Increases unsubsidized annual limits for annual limits for graduates: $12,000graduates: $12,000
SENATESENATE
Borrowing LimitsBorrowing Limits Increases undergraduate Increases undergraduate
annual limits:annual limits: 11stst year: $3,500 year: $3,500 22ndnd year: $4,500 year: $4,500
Increases unsubsidized Increases unsubsidized annual limits for annual limits for graduates: $12,000graduates: $12,000
No expansion to aggregate borrowing limits.
Origination FeesOrigination Fees
HOUSEHOUSE Phases down borrower Phases down borrower
paid fees in Direct to paid fees in Direct to 1%, but raises fee to 3% 1%, but raises fee to 3% in 2006 prior to phase in 2006 prior to phase downdown
Phases out 3% fee in Phases out 3% fee in FFEL by 2010FFEL by 2010
Requires collection of Requires collection of 1% FFEL guarantee fee1% FFEL guarantee fee
SENATESENATE Permits Secretary to set Permits Secretary to set
Direct fee from 1-3%Direct fee from 1-3% Maintains current FFEL Maintains current FFEL
3% fee3% fee Lenders retain ability to Lenders retain ability to
pay fee for borrowerspay fee for borrowers Requires collection of Requires collection of
1% FFEL guarantee fee 1% FFEL guarantee fee
Interest RatesInterest Rates
HOUSEHOUSE Eliminates provision in Eliminates provision in
current law that changes current law that changes variable to fixed 6.8% variable to fixed 6.8% after July 1, 2006after July 1, 2006
Retains current variable Retains current variable rate capped at 8.25%rate capped at 8.25%
SENATESENATE Retains provision in Retains provision in
current law that will current law that will convert the interest rate convert the interest rate on Stafford and on Stafford and Consolidation loans to a Consolidation loans to a fixed 6.8% after July 1, fixed 6.8% after July 1, 2006 2006
Consolidated LoansConsolidated Loans
HOUSEHOUSE Allows borrowers to choose Allows borrowers to choose
either fixed or variable rateseither fixed or variable rates Rate capped at 8.25%Rate capped at 8.25% Permits ‘reconsolidation’ or Permits ‘reconsolidation’ or
refinancing for borrowers refinancing for borrowers seeking income-contingent seeking income-contingent repayment or who are repayment or who are consolidating a defaulted consolidating a defaulted loanloan
SENATESENATE Retains current fixed Retains current fixed
interest rate, but increases interest rate, but increases the origination fee paid to the origination fee paid to 1%1%
No provision for No provision for ‘reconsolidation’ or ‘reconsolidation’ or refinancingrefinancing
Loan DisbursementsLoan Disbursements
HOUSEHOUSE Reinstates expired Reinstates expired
provisions with low provisions with low student loan default student loan default rates to allow them to rates to allow them to waive the 30-day waive the 30-day disbursement delay and disbursement delay and to disburse loan to disburse loan proceeds in one proceeds in one disbursement to new disbursement to new students.students.
SENATESENATE Reinstates expired Reinstates expired
provisions with low provisions with low student loan default student loan default rates to allow them to rates to allow them to waive the 30-day waive the 30-day disbursement delay and disbursement delay and to disburse loan to disburse loan proceeds in one proceeds in one disbursement to new disbursement to new students.students.
Single Holder RuleSingle Holder Rule
HOUSEHOUSE Repeals single holder Repeals single holder
rule but requires rule but requires borrower to consult with borrower to consult with current loan holder current loan holder when consolidatingwhen consolidating
SENATESENATE Repeals single holder Repeals single holder
rulerule
Loan Repayment and ForgivenessLoan Repayment and Forgiveness
HOUSEHOUSE Creates a new 2-year Creates a new 2-year
forbearance forbearance Repeals ‘3-times rule”Repeals ‘3-times rule” Loan forgiveness for Loan forgiveness for
teachersteachers Creates loan forgiveness Creates loan forgiveness
for: nurses, early child- for: nurses, early child- hood educators, math & hood educators, math & science teachersscience teachers
SENATESENATE Creates new loan Creates new loan
forgiveness condition in forgiveness condition in Direct Loan program for Direct Loan program for public sector employeespublic sector employees
School As LenderSchool As Lender
HOUSEHOUSE Clarifies only applies to Clarifies only applies to
Stafford loans for Stafford loans for graduate and graduate and professional studentsprofessional students
Requires use of all Requires use of all institutional revenue to institutional revenue to be used for need-based be used for need-based aidaid
SENATESENATE Imposes a moratorium Imposes a moratorium
on new schools; allows on new schools; allows current schools to current schools to continuecontinue
Requires use of all Requires use of all institutional revenue to institutional revenue to be used for need-based be used for need-based grantgrant aid aid
Experimental SitesExperimental Sites
HOUSEHOUSE Maintains experimental Maintains experimental
sites for the sites for the administration of administration of federal student loans at federal student loans at institutions with institutions with successful programssuccessful programs
SENATESENATE Permits, but does not Permits, but does not
require, the Secretary require, the Secretary the authority to continue the authority to continue successful experimental successful experimental sites at participating sites at participating institutionsinstitutions
Needs AnalysisNeeds Analysis
HOUSEHOUSE Expands ‘auto zero’ to Expands ‘auto zero’ to
families or students who families or students who receive benefits under receive benefits under certain mean-tested federal certain mean-tested federal benefit programsbenefit programs
Creates new ‘EZ FAFSA’Creates new ‘EZ FAFSA’ Increases income protection Increases income protection
allowance to $3,000 for allowance to $3,000 for employed dependent employed dependent studentsstudents
SENATESENATE Expands ‘auto zero’ to Expands ‘auto zero’ to
families or students with families or students with adjusted gross income less adjusted gross income less than $20,000than $20,000
Creates new ‘EZ FAFSA’Creates new ‘EZ FAFSA’ Increases income protection Increases income protection
allowance to $3,000 for allowance to $3,000 for employed dependent employed dependent studentsstudents
AccreditationAccreditation
HOUSEHOUSE Permits states to accredit Permits states to accredit
institutionsinstitutions Establishes new Establishes new
accreditation review accreditation review standardstandard
Requires public disclosures Requires public disclosures of agency actionsof agency actions
Expands the due process Expands the due process provisions in current lawprovisions in current law
SENATESENATE No provision on states No provision on states
accrediting institutionsaccrediting institutions No provision on board of No provision on board of
governancegovernance Requires public disclosures Requires public disclosures
of agency actionsof agency actions Expands the due process Expands the due process
provisions in current lawprovisions in current law
Transfer of CreditTransfer of Credit
HOUSEHOUSE Requires institutions to have Requires institutions to have
a transfer of credit policy a transfer of credit policy and to make it publicly and to make it publicly availableavailable Must include a statement that Must include a statement that
the transfer of credit is not the transfer of credit is not solely denied on the basis of solely denied on the basis of the accrediting agency of the the accrediting agency of the sending institution sending institution
SENATESENATE Requires institutions to make Requires institutions to make
public their transfer of credit public their transfer of credit policiespolicies Which must include (1) a Which must include (1) a
statement that the transfer of statement that the transfer of credit is not solely denied based credit is not solely denied based on the accrediting agency of the on the accrediting agency of the sending institution, and (2) a sending institution, and (2) a list of institutions with which list of institutions with which the institution has a transfer the institution has a transfer articulation agreementarticulation agreement
50% Rules on Distance Education50% Rules on Distance Education
HOUSEHOUSE Repeals the 50% ruleRepeals the 50% rule
SENATESENATE Maintains the 50% ruleMaintains the 50% rule
Definition of InstitutionDefinition of Institution
HOUSEHOUSE Creates a single Creates a single
definition.definition.
SENATESENATE Maintains current lawMaintains current law
Two definitions of Two definitions of institutions for nonprofit institutions for nonprofit and proprietaryand proprietary
Student Information Reporting Student Information Reporting RequirementsRequirements
HOUSEHOUSE No similar provisionsNo similar provisions
SENATESENATE Requires institutions to Requires institutions to
report on ‘student body report on ‘student body diversity’, including diversity’, including information on the information on the percentage of enrolled, full-percentage of enrolled, full-time students who are (1) time students who are (1) male, (2) female, (3) form a male, (2) female, (3) form a low-income background, low-income background, and a self-identified and a self-identified member of a major racial or member of a major racial or ethnic groupethnic group
Alumni Reporting RequirementsAlumni Reporting Requirements
HOUSEHOUSE No similarNo similar
SENATESENATE Requires institutions to Requires institutions to
report to the Department report to the Department information on information on employment placement employment placement of graduates and of graduates and graduates that enroll in graduates that enroll in graduate educationgraduate education
College CostsCollege Costs
HOUSEHOUSE Requires collection of Requires collection of
additional information additional information by the Departmentby the Department
Creates a College Creates a College Affordability IndexAffordability Index
Provisions for Provisions for institutions who fail to institutions who fail to complycomply
SENATESENATE Requires the Requires the
Department to collect Department to collect and provide public and provide public information about costs information about costs of attendanceof attendance
Drug OffensesDrug Offenses
HOUSEHOUSE Clarifies current lawClarifies current law
Applies only to enrolled Applies only to enrolled students who are students who are receiving Title IV Aid receiving Title IV Aid and are convictedand are convicted
SENATESENATE Clarifies current lawClarifies current law
Applies only to enrolled Applies only to enrolled students who are students who are receiving Title IV Aid receiving Title IV Aid and are convictedand are convicted
Non-Student Aid ProvisionsNon-Student Aid Provisions
HOUSEHOUSE The sense of the The sense of the
Congress – universities Congress – universities ‘should facilitate the free ‘should facilitate the free and open exchange of and open exchange of ideas’ and that students ideas’ and that students should not be should not be ‘discriminated against’ ‘discriminated against’ and should be ‘treated and should be ‘treated equally and fairly’equally and fairly’
SENATESENATE No similar provisionNo similar provision
What’s NotWhat’s Not
STAR ProposalSTAR Proposal Switching use of tax tables to an Income Switching use of tax tables to an Income
Protection Allowance (IPS) calculation to Protection Allowance (IPS) calculation to assess family contributionassess family contribution
Limited Return of Title IV changesLimited Return of Title IV changes
Legislation is in state of flux – changes taking Legislation is in state of flux – changes taking place behind the scenes.place behind the scenes.
What Should the Aid Community What Should the Aid Community Be Doing?Be Doing?
Track BillsTrack Bills Be aware of SAVINGS RAIDINGS!!!!!Be aware of SAVINGS RAIDINGS!!!!!
Research effects of proposed changes to your Research effects of proposed changes to your campus and studentscampus and students
Get acquainted with members of your Get acquainted with members of your Congressional DelegationCongressional Delegation
Watch for call for action from NASFAA, Watch for call for action from NASFAA, MASFAA and State Federal Issues contactsMASFAA and State Federal Issues contacts
Restore the Intent of HEARestore the Intent of HEA
““An Act to strengthen the educational resources An Act to strengthen the educational resources of our colleges and universities and to provide of our colleges and universities and to provide
financial assistance for students in financial assistance for students in postsecondary and higher education.”postsecondary and higher education.”
Lyndon B. JohnsonLyndon B. Johnson
January 4, 1965January 4, 1965