Reauthorization of the Higher Education Act

Report
The National Association of Student
Financial Aid Administrators
Reauthorization of the
Higher Education Act
© 2014 NASFAA
WFAA Conference
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Reauthorization
of Higher Education Act
• Law mandates reauthorization every 5-7 years
– Higher Education Opportunity Act passed in 2008
• Reauthorization should occur in 2014
– It won’t happen on time
– The process has started, but there will not be a final bill
• Predictions on timing
– An automatic one-year extension will be granted at end of 2014
– Initial legislation has been released in both House and Senate,
but markups are unlikely in this Congress
– Election recess and a lame duck Congress will slow progress
– Maybe start to see real movement in spring of 2015
© 2014 NASFAA
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NASFAA’s
Reauthorization Task Force
• Began work in January 2012
• Consisted of 17 members from all sectors and
regions
• Forty listening sessions around the country
© 2014 NASFAA
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Total Comments
Campus-Based Aid
2%
Total
Comments
Need Analysis
24%
Verification
5%
Pell Grant
6%
Miscellaneous
8%
R2T4
9%
Loans
23%
Programs
7%
© 2014 NASFAA
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NASFAA’s
Reauthorization Task Force
• Developed 60 comprehensive recommendations
approved by the NASFAA Board
• Recommendations submitted to both the House
and Senate Education Committees in the fall of
2013
• Document will continue to be updated, as the
timetable for reauthorization is fluid
© 2014 NASFAA
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RTF Spin-off Task Forces
Public Service Loan Forgiveness Task Force
• Report released in July 2014
• Key recommendations to strengthen the PSLF
program
– Forgiveness limits: 100% up to $57,500 and
50% of remainder up to $138,500 total
forgiveness
– Keep untaxed
– Increase awareness
– Make data public
© 2014 NASFAA
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RTF Spin-off Task Forces
Consumer Information Task Force
• Report released in August 2014
• Key recommendations to improve consumer information
– Eliminate annual notice and use College Navigator
– Repeal student unit record ban
– Examine usefulness of campus safety and fire safety
reports, etc.
– Eliminate non Title IV-related disclosures (e.g.,
Constitution Day, voter registration, etc.
– Exempt graduate programs from inapplicable
requirements
– Require consumer testing for all new consumer
information requirements
© 2014 NASFAA
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RTF Spin-off Task Forces
Campus-Based Allocation Formula Task Force
• Report released in August 2014
• Four recommendations to modify the campus-based aid
allocation formula
– Reconstruct income bands to more accurate reflect
student need
– Eliminate the base guarantee with phase-in protection
– Restructure FSEOG fair share formula to be based on
Pell funding received by institution with phase-in
protection
– Increase the assumed self-help for undergraduates in
FWS and Perkins fair share formulas from 25% to 35%
with phase-in protection
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RTF Spin-off Task Forces
Task forces starting work in fall 2014
• R2T4
• Competency-Based Education
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Higher Education Affordability Act
• Senate Democrats’ first draft of reauthorization bill
• HEAA introduced on June 25th
• Key provisions:
– PPY
– Year-round Pell
– Eliminates student loan origination fees
– Early notification of potential financial aid packages
– Streamline repayment programs: a 10-yr plan, and an
income-based plan
– Borrowers more than 150 days delinquent auto-enrolled
in IBR
– Full school certification of private loans
– Private student loans can be discharged in bankruptcy
© 2014 NASFAA
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Senators Alexander/
Bennet FAST Act
• Financial Aid Simplification and Transparency (FAST) Act
• Introduced on June 19th
• Eliminates the FAFSA
– Only asks for a student’s family size and adjusted gross
income from two years prior
• Implements a one grant/one loan system
• Streamlines the repayment process into two programs:
– A standard 10-year repayment and an income-based
repayment
• Introduces a “look-up” table that uses family size and PPY
to find the Pell Grant award amount
– Provides early information to students and families
• Institutional authority to limit loans
© 2014 NASFAA
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House GOP Reauthorization
• Released four bills:
– Simplifying the Application for Student Aid Act
– Empowering Students Through Enhanced Financial Counseling Act
(Passed)
– Strengthening Transparency in Higher Education Act (Passed)
– Advancing Competency Based Education Demonstration Project Act
(Passed)
• These bills begin to address the committee’s four
guiding principles:
–
–
–
–
Empowering students and families to make informed decisions
Simplifying and improving student aid
Promoting innovation, access, and completion
Ensuring strong accountability and a limited federal role
© 2014 NASFAA
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House GOP Reauthorization
• Simplifying the Application for Student Aid Act
– Mandates the use of PPY income in federal need analysis
– Not yet marked up
• Strengthening Transparency in Higher Education Act
– Replaces College Navigator with a new site called College
Dashboard
– ED would maintain the site, and it would have institutional
level information related to basic facts about an institution,
such as: sector, web address, enrollment, completion, costs,
financial aid, and cohort default rates
– Passed the full House
© 2014 NASFAA
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House GOP Reauthorization
Empowering Students Through Enhanced Financial
Counseling Act
• Replaces one-time entrance counseling requirement with
annual counseling that must be completed before student
accepts the loan
• Passive confirmation of loans would no longer be allowed
• Exit counseling is expanded to include borrower-specific
information Calls for annual counseling of Pell recipients
• ED required to offer consumer-tested, on-line counseling
• Requires Parent PLUS counseling
• Passed the full House
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Other Reauthorization Marker Bills
• What is a marker bill?
– Legislation that gets introduced to promote an idea or set of ideas,
but without the intent of immediate Congressional action
• Recent marker bills:
– Pell Grant Protection Act (Sen. Hirono)
– Student Loan Borrower Bill of Rights (Sen. Durbin)
– Bank on Students Emergency Loan Refinancing Act (Sen. Warren)
– CHANCE Act (Sen. Landrieu)
– Simplifying Financial Aid for Students Act (Sen. Booker)
– College Affordability & Innovation Act (Sens. Murphy & Schatz)
• It’s clear that Congress is interested in student aid issues
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Other “Hot Topics” for
Reauthorization
• What is going to happen to the undergraduate interest
subsidy?
• What is going to happen to the Campus-Based Loan
programs, including the Perkins Loan Program?
• What will be done to address regulatory burden?
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Questions?
Email: [email protected]
© 2014 NASFAA
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