Magazine article University Business

Back to the Drawing Board: Congress Tries to Tackle Reauthorization of the Higher Education Act ... Again

Magazine article University Business

Back to the Drawing Board: Congress Tries to Tackle Reauthorization of the Higher Education Act ... Again

Article excerpt

Beware: reauthorization approaches. Institutions have heard this repeatedly for the past couple of years, but major systemic changes have yet to take place in higher education. What exactly is the reauthorization of the Higher Education Act? When will it really take place? And what will this mean for the financial aid programs that help your institution's students attend college?

Federal Law requires that the act be renewed--or "reauthorized"--every six years. The most recent reauthorization cycle was supposed to culminate in 2004, but Congress failed to pass legislation before it adjourned.

"Since we did not pass a bill last year, we had to start all over again. That means everything has to be " reintroduced and re-passed," said National Association of Student Financial Aid Administrators President Dallas Martin in March at NASFAA's annual Leadership Conference. House Education and the Workforce Committee Chairman John Boehner (R-Ohio) has promised completion by the end of the current 109th Congress in 2006.


The Republican majority of the House education committee introduced in February the College Access and Opportunity Act (H.R. 609), a reauthorization bill intended to expand college access for low- and middle-income students. A similar bill was introduced last year; hearings were held, but it never came to a vote in the House.

This time around, Congress is focusing on several issues, including college costs and prices, access and affordability, and accountability. Changes proposed by Republicans include expanding Federal Pelt Grants for high-achieving, low-income first- and second-year students; providing year-round Pell Grant aid; and removing an incentive for colleges to raise tuition by repeating a federal rule that limits the amount of Pelt Grant aid low-cost institutions can receive.

However, Chairman Boehner has stated repeatedly that the committee intends to pass "revenue-neutral" legislation, with strategic, if small, program increases that are paid for through cuts to other programs, restructuring, and reforms. "Essentially there is no flexibility, and they will pay for any increases by cannibalizing good programs," Martin said.

The bill would also ease several restrictions currently placed on for-profit institutions. Specifically, it would eliminate both the 90/10 rule (which requires that institutions derive at least 10 percent of their revenue from funds other than Title IV aid), and the 50 percent rule (which mandates that schools deliver 50 percent of their instruction through non-distance learning methods). It also would allow for-profit institutions to compete with traditional institutions for campus-based aid, and specify that transfer-of-credit not be denied solely based on a school's accreditation.

The proposed GOP measure would permanently end a statutory provision under which nonprofit lenders that finance their loans using tax-exempt bonds receive a guaranteed return rate of 9.5 percent, although the bill does not totally close that loophole.

Moreover, it would also expand student loan relief for K-12 teachers of key subjects such as math, science, and special education, and expand opportunities for graduate study in these subjects.

NASFAA's Martin noted that this bill is essentially the same as the GOP-backed measure introduced in the House last year. "Looking at this bill, the same concerns we had last year are stilt there," Martin commented. …

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