US Department of Education, Lynn Mahaffie

Lynn B. Mahaffie
Deputy Assistant Secretary for
Policy, Planning and Innovation
Office of Postsecondary Education
NCHER Legislative Conference
February 2015
President Obama’s
FY 2016 Budget Proposal
President’s FY 2016 Budget
• President Obama’s budget reflects his strong
belief that education is a vital investment in
America’s economy, communities and people.
• Request includes $70.7 billion of discretionary
funds for Department of Education – a 5.4%
• It also includes $ 145 billion in new mandatory
spending over the next decade -- $4.3 billion
for FY 2016.
President’s FY 2016 Budget (con’t)
• Four themes
– Increase equity and opportunity for all students
– Expand high-quality learning programs
– Supporting teachers and school leaders
– Improving access, affordability and student
outcomes in postsecondary education
• Cross cutting commitment to using and
developing evidence to maximize results
President’s FY 2016 Budget
Higher Ed
• America’s College Promise – would provide two
years of free community college for responsible
students -- $60.3 billion over 10 years
• $29.7 billion investment in Pell Grants – maintain
purchasing power after 2017
• FAFSA simplification – eliminates up to 30
• $200 million for American Technical Training Fund
– joint effort with the Department of Labor to
expand job opportunities
America’s College Promise Proposal
•The President is calling on Congress to help make two
years of community college free, for all responsible
students, nationwide
•The proposal would be undertaken in partnership with
states and would let students earn the first half of a
bachelor’s degree or earn skills needed in the workforce at
no cost
•Would benefit nearly nine million students, making higher
education more affordable and saving a full-time community
college student an average of $3,800 in tuition per year
America’s College Promise Proposal
•Everyone has a shared responsibility
•Federal Government: Will cover three-quarters of the average
cost of community college
•States: States that choose to participate will be expected to
contribute the remaining funds necessary to eliminate community
college tuition for eligible students
•Community Colleges: Colleges have to ensure that their
programs enable students to transfer to a four-year degree or
that there are occupational programs for high-demand jobs,
demonstrating strong graduation rates and a focused effort to
help their students succeed
•Students: Must attend at least half-time, maintain a 2.5 GPA in
college, and make steady progress towards completing their
7 program
Regulatory Update
Higher Education Regulatory Initiatives
 Ensuring that student debt remains affordable
 Protecting students from being buried in debt that
they cannot repay
 Keeping college campuses safe
 Increasing access for underserved populations
 Making sure that teachers are well-prepared upon
entering the classroom
Pay As You Earn Expansion
– Federal Register Notice published Sept. 3,
– We propose to develop regulations that:
 Allow more students the opportunity to
cap their monthly student loan
payments at 10%
 Target the new PAYE option to
borrowers who would otherwise struggle
to repay their student loans
Pay As You Earn Expansion
• Two public hearings held in late 2014 in Washington,
DC and Anaheim, CA
• Federal Register Notice inviting negotiator
nominations published in December 2014 –
committee selected late last week
• Negotiating sessions will begin Feb. 24-26, 2015:
Three sessions
Approximately 3 days each
At roughly monthly intervals
Teacher Preparation
• Teacher Preparation Negotiated Rulemaking Committee
Negotiations were held in November 2012
Consensus not reached
NPRM published on December 3, 2014
Comment period closed February 2nd
We received over 3,600 comments
Except for the Teach Grant component, these proposed
regulations are not subject to the Master Calendar
Recent Regulatory Efforts
 Gainful Employment
 Final rule published October 31, 2014
 Effective July 1, 2015
 Violence Against Women Act
 Final rule published October 20, 2014
 Effective July 1, 2015
 Program Integrity and Improvement
 PLUS portion published October 23, 2014
 Will implement early – March 29, 2015
Program Integrity and Improvement
 Issues negotiated:
 Cash management
 State authorization of distance education programs
 State authorization of foreign locations of domestic
 Definition of PLUS adverse credit history
 Repeat coursework
 Clock-to-credit hour conversion
 Tentative agreement reached on some issues, but overall
consensus not reached
Program Integrity and Improvement
• Definition of PLUS adverse credit history
• NPRM published on August 8, 2014
• Final rule published October 23, 2014
• Effective July 1, 2015. However, ED will early implement on March 29,
• Revised definitions and amounts apply to both Parent
PLUS and Grad PLUS loans
• Revised adverse credit definition
• If the applicant has one or more debts with combined outstanding balance
greater than $2,085 that is: (1) 90 or more days delinquent or (2) placed in
collection or charged off during previous two years of credit report
• $2,085 can be increased by ED based on CPI if the
change would be ≥ $100
• Borrowers with extenuating circumstances or endorser
must complete counseling
Other ED Activities
College Ratings
•College Ratings Framework
•Released on December 19, 2014
•Inviting comment from the public until February 19, 2015
•The purpose of the college ratings system is to:
•Help colleges and universities measure, benchmark, and improve
across shared principles of access, affordability, and outcomes
•Provide better information about college value to students and families
to support them as they search for select a college
•Generate reliable, useful data that policymakers and the public can use
to hold America’s colleges and universities accountable for key
performance measures; ensuring wise and effective use of $150 billion
in financial aid
College Ratings
•Encourage a focus on access, value, affordability and completion
•Broad ratings, not specific rankings
•Compare colleges with similar missions
•Link federal aid to institutions that do the most to help students from
disadvantaged backgrounds
Perkins Dear Colleague Letter
Issued January 30, 2015
Absent Congressional Action, schools may not make Perkins loans to new
borrowers after September 30, 2015.
Perkins loans for the 2015-16 award year -- if an initial disbursement was
made before October 1, 2015, subsequent disbursements can be made on
the loan.
Grandfathering provision– Narrow provision that allows schools to make
loans to certain students for up to 5 years.
At least one disbursement prior to June 30, 2015
Same institution
Same academic program
Award only after student has been awarded all Direct Subsidized Loan aid for which the
student is eligible
3rd Party Servicer
Dear Colleague Letter
• January 9th – Department issued guidance to
institutions that contract with 3rd party
• Reminds institutions of obligation to report
and update
• Clarifies which types of entities should be
reported as third party servicers
Pell and Juvenile Justice – Dear
Colleague Letter
• Provides additional guidance on the eligibility of Pell Grants for
incarcerated students by pointing out that individuals housed in
juvenile justice facilities are eligible for Pell.
• These juvenile justice facilities (local and county jails) are not
Federal or State penal institutions and do not meet the definition
under the HEA. As such, students detained in juvenile justice
facilities are eligible for Pell (34 CFR §600.2).
• It is the responsibility of the institution to determine if the facility
qualifies as a juvenile justice facility.
First in the World
• Part of a national agenda to lead the world in proportion of
citizens with postsecondary degrees and credentials
• Spur innovation to drive down costs and maintain quality
• Support projects that lead to proven results
• Support innovative and novel solutions to higher ed.
First in the World
• Nearly 500 applications were submitted for the FY 2014 FITW grant
• $75 million awarded to 24 colleges and universities
• The 24 colleges and universities selected for this initial year of awards
represent 17 states, 19 public, private, and nonprofit 4-year institutions
and five public and private two-year institutions
• Six of the 24 winning applications—including an HBCU—are from
minority serving institutions (MSIs), which will receive about $20 million in
• New competition in FY 2015

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