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Renewing the Higher Education Act: Resources for Students and Institutions

Renewing the Higher Education Act​​

​The Higher Education Act

​HEA Reauthorization

Congress has started the process of reauthorizing the Higher Education Act (HEA). The HEA, originally authorized in 1965, is supposed to be renewed every five years. The last reauthorization was approved in 2008 through a bill known as the Higher Education Opportunity Act. 

HEA is the single most important piece of legislation overseeing the relationship between the federal government, colleges and universities, and students. The legislation authorizes various federal aid programs within the Department of Education that support students pursuing a postsecondary education, including grant programs that support efforts to expand and increase access for low-income and first-generation students, such as TRIO

The legislation also includes rules and regulations that higher education institutions must comply with to be eligible for Title IV federal student aid programs, including the Clery Act, which requires annual campus crime reports; rules governing the accreditation process; and financial responsibility requirements.   

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House Action: The PROSPER Act​

Senate Action: Moving Forward​

On Dec. 1, 2017, House Education and Workforce Chair Virginia Foxx (R-NC) introduced the Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act (H.R. 4508). The committee marked up and approved the bill along party lines on Dec. 13.>/p>

ACE, the higher education association community, and veterans’ groups are on record opposing the PROSPER Act as written and will oppose the bill if it is brought to the floor for a vote. In the face of this opposition, it is unclear when the bill may move. Below are statements and letters outlining concerns with the PROSPER Act:

Association Statements on the PROSPER Act
Letters to the House on the PROSPER Act
 
 

The Senate has not introduced comprehensive legislation to reauthorize the Higher Education Act. Lamar Alexander (R-TN), chair of the Senate Committee on Health, Education, Labor and Pensions (HELP), has indicated he would like to move reauthorization legislation in a bipartisan manner, working closely with HELP Ranking Member Patty Murray (D-WA). To that end, the committee has held a series of hearings on affordability, accountability, access and innovation, and financial aid and transparency.  

In February 2018, Sen. Alexander issued a white paper on accountability proposals​. Later that same month, both Sens. Alexander and Senator Murray issued a bipartisan call Feb. 13, 2018 for input from the community on the reauthorization. The following comments were submitted:​

We continue to monitor the activity in the Senate.
 

Updated April 2018
 
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Undergraduate Students


Under HEA, the Department of Education provides funds to help students access postsecondary education. These include awards that do not need to be repaid such as Pell Grants, Federal Work-Study (FWS), and Federal Supplemental Educational Opportunity Grants (FSEOG). The federal government also operates the Stafford Direct Loan Program, which provides subsidized and unsubsidized loans to students. 


The House PROSPER Act

The PROSPER Act has multiple provisions that would negatively impact current and future undergraduate students. As part of efforts to “streamline and simplify” federal student aid, this bill would eliminate or reduce these important programs: 

Federal Supplemental Educational Opportunity Grants

FSEOG targets grant aid to low-income students whose needs aren’t fully met by Pell Grants and other sources of aid. For more on how the program works to su​pport these students, see the brief, "The Case for Federal Supplemental Education Opportunity Grants."

Subsidized loans to low-income undergraduates

These loans are based on financial need, and the federal government pays the interest on the loan while the student is in sc​hool and during certain grace and deferment periods. As a result, students will wind up paying significantly more over the life their loans.

A number of existing benefits available to students in the current loan programs

The most significant of these would be the elimination of loan forgiveness that allows borrowers who have made on-time payments to have their balances forgiven by the federal government after 10, 20 or 25 years (depending on certain factors). 

Federal Work-Study dollars would be reallocated across a larger number of institutions

This will benefit students at some colleges and universities, but will also reduce available funds at most institutions currently participating in FWS. 

**Click here to download a file​ with estimates of the impact of the reallocation of SEOG and FWS on your institution. (Additional information about the calculations can be found here.) 


Senate Action

The Senate has held several hearings on issues important to undergraduates, including “Improving College Affordability” and “FAFSA Simplification and Transparency​.”

Senator Alexander is the sponsor of the Financial Aid Simplification and Transparency (FAST) Act of 2015. The legislation would streamline the campus-based aid programs and existing loan programs, eliminate SEOG, and create a single loan program for undergraduate and graduate students. Under this legislation, SEOG and the subsidy for undergraduate student loans would be eliminated. It is unclear at this time if Chairman Alexander intends to move the FAST Act as part of the reauthorization of the Higher Education Act.  


Updated April 2018

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FSEOG helps students complete degrees faster. The average FSEOG student earns a bachelor's degree about one year faster than the average Pell-only student.

 
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the higher education act

HEA Reauthorization

Congress has started the process of reauthorizing the Higher Education Act (HEA). The HEA, originally authorized in 1965, is supposed to be renewed every five years. The last reauthorization was approved in 2008 through a bill known as the Higher Education Opportunity Act.

HEA is the single most important piece of legislation overseeing the relationship between the federal government, colleges and universities, and students. The legislation authorizes various federal aid programs within the Department of Education that support students pursuing a postsecondary education, including grant programs that support efforts to expand and increase access for low-income and first-generation students, such as TRIO.

The legislation also includes rules and regulations that higher education institutions must comply with to be eligible for Title IV federal student aid programs, including the Clery Act, which requires annual campus crime reports; rules governing the accreditation process; and financial responsibility requirements.

Resources

The Higher Education Act: A Primer

Congressional Research Service (Aug. 25, 2017)

2013 Community Principles for HEA Reauthorization


House Action: The PROSPER Act

Senate Action: Moving Forward

On Dec. 1, 2017, House Education and Workforce Chair Virginia Foxx (R-NC) introduced the Promoting Real Opportunity, Success, and Prosperity Through Education Reform (PROSPER) Act (H.R. 4508). The committee marked up and approved the bill along party lines on Dec. 13.

ACE, the higher education association community, and veterans’ groups are on record opposing the PROSPER Act as written and will oppose the bill if it is brought to the floor for a vote. In the face of this opposition, it is unclear when the bill may move. Below are statements and letters outlining concerns with the PROSPER Act:

Resources

Summary of the House PROSPER Act

American Council on Education

Talking Points on the PROSPER Act

American Council on Education

AACC’s Brief Summary of the Promoting Real Opportunity and Success and Prosperity Through Education Reform Act

American Association of Community Colleges

PROSPER Act: House Republicans' HEA Bill

National Association of Student Financial Aid Administrators

APLU Top Concerns with the Promoting Real Opportunity, Success, and Prosperity Through Higher Education Reform (PROSPER) Act, H.R.4508

Summary of APLU's Top Concerns

Association of Public and Land-grant Universities

Department of Defense Information Paper in Opposition to the PROSPER Act


PROSPER Act Op-Eds​

Statements and Letters

Association Statements on the PROSPER Act
Letters to the House on the PROSPER Act

The Senate has not introduced comprehensive legislation to reauthorize the Higher Education Act. Lamar Alexander (R-TN), chair of the Senate Committee on Health, Education, Labor and Pensions (HELP), has indicated he would like to move reauthorization legislation in a bipartisan manner, working closely with HELP Ranking Member Patty Murray (D-WA). To that end, the committee has held a series of hearings on affordability, accountability, access and innovation, and financial aid and transparency.

In February 2018, Sen. Alexander issued a white paper on accountability proposals. Later that same month, both Sens. Alexander and Senator Murray issued a bipartisan call Feb. 13, 2018 for input from the community on the reauthorization. The following comments were submitted:

We continue to monitor the activity in the Senate.

Resources

Higher Education Act Reauthorization Principles

Senate Democratic Caucus

Higher Education Accountability

White Paper from Lamar Alexander, Chair of the Senate Committee on Health, Education, Labor and Pensions
Responses:
American Association of Community Colleges
Association of American Universities
Association of Public and Land-grant Universities

Letter to the Senate HELP Committee on the Bennett Hypothesis

American Council on Education

Letter from David H. Feldman, professor of economics at the College of William & Mary, on the Bennett Hypothesis


Updated April 2018​​

Media Contacts

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Graduate Students

The federal government provides grants and loans to graduate students, but this support has been on the decline in the past decade.

To begin with, graduate students pay higher interest rates on student loans than undergraduates. Then in 2012, the government eliminated the subsidy for federal graduate student loans, meaning interest begins to accrue from the time the loan is disbursed. Graduate students also lost eligibility for campus-based Perkins loans, which provided lower interest rates and cancellation options for public service until Congress allowed it to expire in Sept. 30, 2017.  

The government also has cut funding for federal grant programs that support areas of study for graduate students, including the Jacob K. Javits Fellowship Program, which supports fellowships in the humanities, and the Graduate Assistance in Areas of National Need (GAANN) program, which supports grants in science, technology, engineering, and mathematics (STEM) fields and other areas of national need.  


The House PROSPER Act

The PROSPER Act continues the recent trend of cutting federal support for graduate students by eliminating eligibility for Federal Work-Study (FWS), eliminating graduate PLUS loans, capping graduate loan limits, and eliminating Public Service Loan Forgiveness (PSLF).  

Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need

It is available to full-time and part-time students.  In 2016-17, over 619,000 students benefited from $990 million appropriated to FWS in FY 2017.

Graduate PLUS loans provide federal student loans up to the cost of attendance for qualified borrowers

The House PROSPER Act sets an annual limit for Graduate ONE loans of $28,500 with an aggregate cap of $150,000 (including undergraduate loans). Given these new limits on federal student loans, graduate students will need to borrow in the private loan market at greater cost and with less favorable terms. This chart illustrates the current federal Stafford Direct Loan limits and the new proposed federal ONE Loan limits. (Current limits that would be struck under the House PROSPER Act are struck through. New loan limits are illustrated in black text. Click to enlarge.)

PROSPER Act Borrowing Limits 
 
 

Public Service Loan Forgiveness forgives the balance of federal student loans for qualifying borrowers after 10 years working in the public sector

This program has helped to recruit social workers, teachers, federal and state government workers, doctors serving high need, rural populations, and others.


Senate Action

The Senate has held several hearings on the Higher Education Act reauthorization, but none have specifically focused on graduate students. Senate HELP Chairman Lamar Alexander (R-TN) has previously proposed legislation that would eliminate the current Grad PLUS program and create a new loan program that would impose annual borrowing limits for graduate students. The legislation would continue existing provisions that provide higher annual limits for students in programs with higher need (such as medical schools). 


Updated April 2018

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Graduates & Student Borrowers


​The federal government provides support to graduates and student borrowers in several ways, including Public Service Loan Forgiveness (PSLF), Income-Based Repayment (IBR) plans, and specific programs such as TEACH Grants.  In addition, the Department of Education protects students against fraud and restores Title IV student aid eligibility through “borrower defense” regulations, which allow students to appeal the repayment of their loans if they were defrauded by an institution. 


The House PROSPER Act

The PROSPER Act eliminates several important programs in an attempt to streamline repayment and forgiveness options for student borrowers, including:

Public Service Loan Forgiveness

Established in 2007, PSLF provides forgiveness of federal student loans for borrowers who make on-time payments and work in qualifying public service employment for 10 years such as qualifying medical schools and teaching hospitals, employment with AmeriCorps or Peace Corps, military service, public health, public safety, and other similar types of employment. By forgiving remaining student loan debt, PSLF creates incentives for motivated and committed individuals to pursue careers in public service.

Most Income-Based Repayment Programs

The bill would replace the current IBR programs with one program that does not include any forgiveness provisions. Currently a borrower who enters an IBR program can have the balance of that loan forgiven after 10, 20, or 25 years of qualified repayments, depending on their plan and career. 

TEACH Grants

TEACH Grants provide $4,000 per year to students who agree to teach for four years at a qualifying elementary or secondary school that serves low-income students. If a student does not qualify, the grants convert to federal loans and must be repaid.  

The bill also rewrites the rules on borrower defense to repayment. Under current law, federal student loan borrowers may be eligible for forgiveness of their federal student loans if their college or university misled them or violated certain laws. The PROSPER Act would make it much harder for borrowers to receive this type of forgiveness. 


Senate Action

As part of the series of hearings on HEA reauthorization, Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on “Accountability and Risk to Taxpayers​” on Jan. 30, 2018.  During his opening statement​, Chairman Alexander noted that the current Income Based Repayment (IBR) programs were designed to act as a “temporary safety net” but had “become a standard where students expect their debt to be forgiven after a certain amount of time.  This may be good for students, but it is not so good for the taxpayers.” Chairman Alexander will likely seek to make significant changes to the current IBR programs in the upcoming reauthorization.


 

Updated April 2018

 
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Colleges & Universities

​HEA is the primary legislation overseeing the relationship between campuses and the federal government. The legislation directs grant and loan programs that support institutional efforts to expand access, encourage completion, and support research and education in international programs.

HEA also includes accountability provisions and safeguards against fraud and abuse of the aid programs. In addition, it provides the statutory basis for regulations that colleges and universities must abide by in order to accept Title IV funding, including campus safety rules, accreditation standards, and reporting requirements on various issues such as textbook prices.  


The House PROSPER Act

The PROSPER Act reduces and eliminates funding for many of the institutional grant programs, including:

  • Eliminating the Title IIIA Strengthening Institutions program and amending the long-standing Title IV return-of-funds process by adding a risk-sharing component that will have an especially negative impact on community colleges.

  • Making changes to the formula to determine an institution’s Federal Work-Study (FWS) allocation, while not guaranteeing that funding for FWS will be increased. This proposed change, along with the elimination of federal Supplemental Educational Opportunity Grants (SEOG), could result in significant cuts in campus-based aid for institutions participating in the program. 

  • Capping authorization levels for most programs at FY 2017 funding levels, which limits funding growth for important programs like Graduate Assistance in Areas of National Need (GAANN) and Title VI international programs.

  • Reducing the authorization level for TRIO programs below FY 2017 levels (from $900 million to $850 million), while mandating a new institutional match of funds and also creating new criteria for awarding grants that would penalize existing programs. 

  • Eliminating several of the Title IV international programs including American Overseas Research Centers and Undergraduate International Studies and Foreign Language programs. 

While the House PROSPER Act takes many of the recommendations from the 2015 Report of the Task Force on Federal Regulation of Higher Education, it also creates new and burdensome complicated and mandated rules and regulations, including:

  • New restrictive mandates about what can and cannot be included in a campus free speech policy; new provisions that restrict how a college or university can respond to issues with single-sex organizations on campus; and restrictions surrounding how a university can respond to student organizations with a religious affiliation. 

  • New requirements surrounding sexual assault on campus, including the creation of a mandatory survivor’s counselor; a requirement that institutions carry out a campus climate survey every three years; and restrictions on campus administrators' ability to adjudicate on these cases. 

  • Despite reducing accountability measures across the overwhelming majority of programs and institutions, the PROSPER Act would impose a new accountability metric (based on completion rate) solely on certain categories of minority-serving institutions’ eligibility for institutional (Title III and Title V) support.

  • Despite efforts to reduce the regulatory burden on colleges and universities, this bill imposes new and complicated mandates on institutions. Significant changes to the law, such as requiring weekly or monthly financial aid disbursements, public disclosures, and programmatic repayment rates (among others), would substantially increase the time and funding needed to comply and further undermine the ability of institutions to serve students and accomplish their missions.

  • The legislation reduces the number of standards required of accreditors to assess institutions by, from ten to one. The remaining standard is solely focused on student outcomes and the legislation eliminates institutional participation in the process accreditors use to establish student outcome measures.    

Finally, while the House PROSPER Act greatly expands the number of programs and providers able to access federal funds, it simultaneously relaxes the requirements that keep unscrupulous actors out of the system. This combination of greatly expanded eligibility with lax oversight will necessarily lead to large increases in fraud and abuse in the Title IV federal aid programs.  ​


Senate Action

 

Unlike in the House, a comprehensive legislative proposal has not yet been introduced in the Senate. While numerous proposals for changing HEA have been introduced in the Senate over the last few years, the Senate Health, Education, Labor and Pensions (HELP) Committee does not currently appear close to introducing a comprehensive bill.  

In February 2018, HELP Chairman Lamar Alexander (R-TN) circulated a white paper on accountability​ and asked for comments from stakeholders.  The paper questioned the efficacy of current accountability measures such as the 90/10 rule or the cohort loan default rate.  The paper also examined the idea of programmatic repayment rates, arguing that programmatic measurements are a better indicator for prospective students.  Senator Alexander is likely to propose these ideas in HEA reauthorization legislation.  


 
Updated April 2018