Issue Brief - 110th Congress: Higher Education Act

The Higher Education Act (HEA) provides almost $50 billion in loans, grants, work-study and institutional aid in support of postsecondary education. Ninety-five percent of the funding is through Title IV aid to students while the remainder is used to improve teacher quality, ensure access and improve postsecondary institutions.

NASDCTEc believes that the career technical education community has an important role to play during HEA reauthorization, particularly since a significant part of our community is comprised of community and technical colleges. Our advocacy efforts will be focused on two areas of primary importance to the membership—teacher quality and leadership development.

Issues

• Teacher Quality - NASDCTEc recommends that language included in Title II of the Higher Education Act (Teacher Quality Enhancement Grants for States and Partnerships) reflect the fact that career technical education teachers should be required to have not only the requisite teaching skills, but also the technical content knowledge in the CTE subject area in which they are assigned to teach.
• Pell Grants – NASDCTEc strongly encourages additional funding to increase the maximum Pell Grant award from $4,050 to $4,500.
• Supplemental Educational Opportunity Grants - NASDCTEc supports a $115 million increase for the SEOG program to bring funding to $875 million. SEOG provides additional assistance to Pell recipients. Postsecondary institutions match one-third of the SEOG funding.
• Federal Work-Study - NASDCTEc supports an increase of $157 million for the Federal Work-Study program, which would bring funding to $1.61 billion. This program provides students with a means to pay the costs of their postsecondary education through jobs on campus, within communities, and in the private sector. Institutions must match federal funding by at least one-third.
• TRIO - NASDCTEc supports an increase of $173 million for the TRIO program, bringing the total to $1 billion. TRIO provides support services to low-income, first-generation students to help them overcome non-financial barriers to prepare for, enter, and graduate from college.

Current Status

The Higher Education Act (HEA) was once again slated for reauthorization during the 109th Congress, but the bill was left incomplete. The budget reconciliation portion of the Higher Education Act (College Cost Reduction Act of 2007) was signed into law by President Bush on September 27, 2007. The Senate has passed their version of the Higher Education Act Reauthorization, while the House is expected to complete their version of the bill in early 2008.

Legislative History in 110th Congress

House

• July 11, 2007 - College Cost Reduction Act of 2007 (HR 2669) is passed by a vote of 273-149. Roll Call
• September 7, 2007 - The Conference Report for HR 2669 is accepted by both the House and the Senate. House Roll Call
• The Higher Education Act Reauthorization has yet to be introduced in the House.

Senate

• July 20, 2007 - College Cost Reduction Act of 2007 (HR 2669) is passed by a vote of 78-18. Roll Call
• July 24, 2007 - Higher Education Amendments of 2007 (S. 1642) is passed by a vote of 95-0. Roll Call
  • Highlights of S. 1642:
    • Disclosure requirements – The bill adds new reporting and disclosure requirements for institutions and lenders. Section 112 requires that a lender provide a student with a specific set of disclosures, in writing, before the lender provides a student with an educational loan.
    • Pell grants – S. 1642 authorizes an increase in the annual Pell grant to $6,300 in academic year 2011-12, phased in from its current level of $4,310.
    • Code of conduct – Section 480 of the bill requires colleges to establish codes of conduct regarding their relationships with lenders. Specifically, the legislation includes a revenue-sharing prohibition: it prohibits anyone employed by the financial aid office at an institution from accepting anything worth more than a nominal value, or entering into a consulting relationship with a lender. Furthermore, disclosure is required of institutions in establishing a preferred lender list.
    • National student loan data system – S. 1642 seeks to establish guidelines for the administration of the National Student Loan Data System (NSLDS) in an effort to maintain confidence in the system. Section 478 of the bill requires the Secretary to ensure that access to the database is for legitimate program operations.
    • Simplified FAFSA – S. 1642 simplifies the Free Application for Federal Student Aid (FAFSA), and permit applicants to complete the form earlier so students and their families can better prepare for postsecondary education. The bill also transitions to a paper-free FAFSA, increasing reliance on the electronic version.
• September 7, 2007 - The Conference Report for HR 2669 is accepted by both the House and the Senate. Senate Roll Call

Highlights of the College Cost Reduction Act of 2007:

• Interest Rate Reductions – Reduces interest rates on subsidized Stafford loans. Lowers interest rates in incremental amounts from their current level of 6.8 percent to 3.4 percent in 2012.
• Mandatory Pell Grant Increases – New mandatory funding for Pell Grants to increase them from their current level of $4,310. The maximum Pell grant would increase by $490 in academic years 2008-09 and 2009-10; by $690 in 2010-11 and 2011-12; and $1,090 in 2012-13. These increases will bring the maximum Pell grant to $5,400 in the 2012-13 academic year.
• Upward Bound – Provides $57 million in each of Fiscal Years 2008-11 to Upward Bound projects that did not receive assistance in FY 2007 and received a grant score of above 70.
• TEACH Grants – Creates TEACH (Teacher Education Assistance for College and Higher Education) grants. TEACH grants will provide $4,000 a year, with a $16,000 maximum, to undergraduate and graduate students who agree to teach a high-need subject in a high-need school for four years. Recipients who do not complete their service requirement will be required to repay TEACH grants as loans under the Higher Education Act, Title IV, Part D.
• Lender Cuts – Lowers the percentage which guarantee agencies are allowed to retain from payments made through collections on defaulted loans from 23 percent to 16 percent.
• Income-Based Repayment – Gguarantees that all borrowers’ loan payments will be limited to 15 percent of their discretionary income. Unpaid interest on subsidized loans is to be paid by the government. Unpaid principal balances after 25 years of repayment shall be forgiven in the income-based repayment program.
• Loan Forgiveness – A new loan forgiveness program is created for public service employees. Under the plan, loan balances under the Direct Loan program (but not the Federal Family Education Loan (FFEL) program) shall be canceled for a borrower who has been employed in a public sector job and making payments on the loan for ten years. Among those defined in the legislation as public sector employees: a full-time job in emergency management, military service, law enforcement, public education, and public child care.
• Competitive Loan Auction Pilot Program – Creates a new competitive loan auction pilot program for all eligible PLUS loans. (PLUS loans are loans made to parents of dependent students.) Under the pilot program, one auction per state shall be administered by the Secretary of Education in which eligible lenders shall compete to originate all eligible PLUS loans at institutions of higher education within the state.

For further information on NASDCTEc’s positions, contact: Domenic Giandomenico, Director of Government Relations.