reauthorization of the higher education act
DESCRIPTION
The National Association of Student Financial Aid Administrators. Reauthorization of the Higher Education Act. WFAA Conference. 1. Reauthorization of Higher Education Act. Law mandates reauthorization every 5-7 years Higher Education Opportunity Act passed in 2008 - PowerPoint PPT PresentationTRANSCRIPT
© 2014 NASFAA
Reauthorization of the Higher Education Act
WFAA Conference
1
The National Association of Student Financial Aid Administrators
© 2014 NASFAA 2
Reauthorizationof 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 3
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 4
Total Comments
Need Analysis24%
Loans 23%
Programs7%
R2T49%
Miscellaneous8%
Pell Grant6%
Verification5%
Cam
pus-
Base
d A
id2%
Total Comments
© 2014 NASFAA 5
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 6
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 7
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 8
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
© 2014 NASFAA 9
RTF Spin-off Task Forces
Task forces starting work in fall 2014
• R2T4
• Competency-Based Education
© 2014 NASFAA 10
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 11
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 12
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 13
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 14
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
© 2014 NASFAA 15
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
© 2014 NASFAA 16
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?
© 2014 NASFAA 18