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President to President

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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President to President, September 26-30, 2011

Vol. 12, No. 25

  • House Passes 96-Hour Continuing Resolution
  • House Appropriations Committee Releases Draft FY 2012 Labor-HHS Funding Bill
  • Gainful Employment Update: ED Issues Amendment to Regulations, Files Motion to Dismiss Suit
  • IN BRIEF: ED Releases Teacher Education Plan; Higher Education Regulations Study Unveiled; Lawmakers Call for Crackdown on Fraud in Online Programs

The pro forma vote sets the stage for the entire House to hold a roll call vote Tuesday on a bill to fund the government through Nov. 18, a compromise measure the Senate passed 79-12 on Monday. The six-week CR became possible when Senate leaders agreed to provide less money to the Federal Emergency Management Agency for disaster relief than Democrats had wanted, rendering moot a Republican demand to offset the disaster assistance with spending cuts in two technology programs popular with Democrats.

As I noted last week, the House has approved six of the 12 appropriations bills for the coming fiscal year, but the Senate has not considered any of the measures passed by the House. With slightly more than two months left in this session, we expect Congress and the White House to turn their attention to an omnibus spending plan for FY 2012 that consolidates all 12 bills into a single measure. The goal will be to have the measure signed into law when the Nov. 18 CR expires. As you well know by now, any spending discussions can easily lead to deadlock and talks of a government shutdown, so we can expect another wild ride between now and the middle of November.

We will be closely watching the funding decisions made by the House and Senate appropriations committees responsible for the Departments of Labor, Health and Human Services, Education and Related Agencies. This week the House committee released a draft spending plan that recommends $153.4 billion for these agencies, some $4 billion below FY 2011.

The Education Department (ED) would receive $69 billion under the proposal, which is $2.4 billion below FY 2011. The maximum Pell Grant will remain at $5,550, which is welcome news. However, to maintain the maximum award the bill makes a number of changes that will reduce awards or eliminate eligibility for some students. For example, the bill reduces the number of years a student can receive a Pell Grant from nine to six, rolls back some of the eligibility changes approved in the College Cost Reduction and Access Act of 2007, and eliminates eligibility for part-time students and those who do not have a high school diploma or GED test credential. Taken together, these changes are estimated to save $3.6 billion next year.

The bill also decimates funding for Historically Black Colleges and Universities, Hispanic-Serving Institutions, and Tribal Colleges. GEAR UP, Federal TRIO Programs, Supplemental Educational Opportunity Grants and Federal Work-Study are level-funded. The plan also blocks ED's gainful employment, credit hour and state authorization regulations by prohibiting the department from spending money to implement or enforce them.

This bill was released in a highly unusual fashion. In the past, we have only seen this bill after it has been fully considered by the House Appropriations Committee—in other words, we don't see it until it is about to be considered by the full House. This year, however, the bill was released before any committee consideration; in fact, there is no plan to schedule any committee action on the measure. Moreover, it was quietly made available on a Thursday afternoon in a week when the House was on recess—not a time when it was likely to get widespread attention.

Many observers believe that this proposal is a "marker" put down by House Subcommittee Chairman Denny Rehberg (R-MT) that will be used as a "starting point" for negotiations when House and Senate subcommittees begin to develop the FY 2012 spending plan. The Senate Appropriations Committee has already considered its version of the Labor, HHS, and Education and Related Agencies spending bill. As with the House, it is very unlikely the full Senate will ever consider this measure.

We are in the process of estimating the actual impacts of the changes to the Pell Grant Program in the House bill. I'll provide a more extensive analysis of the two spending plans and the murky political environment next week.

Two significant developments occurred this week regarding the Education Department's (ED) new gainful employment regulations.

First, ED published a notice of proposed rulemaking (NPRM) in Tuesday's Federal Register to amend the approval process for new programs that fall under the new rule. The NPRM seeks to make the approval process easier for new vocational programs. The final regulations published in October 2010 mandated that an institution notify ED before offering a new program that would fall under the regulations (one that leads to gainful employment in a recognized occupation). ED would then have the option of telling the institution that it needs approval to establish the program. The new rule would require an institution to apply to ED only if it was starting a program that was the same as or substantially similar to a failing program that had been discontinued or was currently failing.

Also on the gainful employment front, ED and Sec. Arne Duncan filed documents this week asking a federal court to dismiss a lawsuit challenging the gainful employment rules, saying the department's procedures in adopting the regulations were "fully consistent with applicable law." Sec. Duncan and the department "deny that the regulations were unduly influenced by any external group," as the Association of Private Sector Colleges and Universities (APSCU) claimed in its July lawsuit. They also argue the federal court lacks jurisdiction in the matter, APSCU failed to exhaust all of its administrative remedies, and the lawsuit failed to state a claim the court could remedy.


Sec. Arne Duncan this morning released his plan for teacher education reform at a panel discussion attended by National Education Association President Dennis Van Roekel and Teach for America Founder and President Wendy Kopp, among others. We are reviewing the details of the plan, and I will share additional information as it moves into an expected negotiated rulemaking session this fall.

In the Higher Education Opportunity Act of 2008, Congress charged the Advisory Committee on Student Financial Assistance with conducting an analysis of regulations affecting higher education to determine which regulations are overly burdensome and need to be streamlined, improved or eliminated. The preliminary report was unveiled this week and presents findings from all study efforts thus far, including the administration of a web-based survey designed to assess the perceptions of the higher education community toward specific regulations and the regulatory system as a whole. The committee plans to deliver the final report for the study to Congress and Sec. Duncan later this year. Also see Inside Higher Ed's piece on the report, Too Many Rules.

Reps. George Miller (D-CA) and Rubén Hinojosa (D-TX) sent a letter to the Education Department Wednesday, calling for swift action on recommendations in a new report by the department's inspector general describing a sharp increase in fraud in distance-education programs. The congressmen also requested regular updates on the progress of an intra-department work group set up to combat online fraud rings, which recruit "straw students" to enroll in distance education programs in exchange for a cut of their student aid. They often target low-cost community colleges to maximize the refund the straw students receive after paying tuition. Since 2005, 215 participants in 42 different fraud rings have been convicted, and $7.5 million in student aid has been ordered returned to the federal treasury.

Molly Corbett Broad
President of ACE