Catching Up with Capitol Hill April 23, 2012

1. Catching Up with Capitol Hill April 23, 2012 Catching Up with Capitol HillApril 23, 2012 David Baime, Senior VP of Government Relations and Research, AACCJim Hermes, Director of Government Relations, AACCJee Hang Lee, Director of Public Policy, ACCTLaurie Quarles, Legislative Associate, AACC

2. Legislative Update • Obama FY 2013 Budget Proposals • House Budget Resolution • Workforce Legislation • TAACCCT Grant Program • Credit Hour/State Authorization Legislation (HR 2117) • Department of Defense MOU/Veterans Legislation • ED Action Plan on Postsecondary Measures

3. The Year In Progress — Much Talk, Less Action • Budget Issues Will Again Dominate Agenda • Across-the-Board Sequestration is Looming • Presidential/Congressional Politics—Congress Knows It’s Unpopular and Wants Achievements • Fiscal Conservatives Remain Fervid • Testy “Endgame” Seems Likely (Final FY 2013 Appropriations, Debt Ceiling Increase, Bush Tax Cuts, Automatic Cuts)

4. Obama FY 2013 Budget • Significant Emphasis on Higher Education and Community Colleges in State of Union • Campaign (Polls) Driving Proposals • Higher Education Proposals Included in FY 2013 Budget • Long Odds for Full Enactment

5. Community College to Career Fund • $8 Billion Over Three Years • Four Major Components • Grants to community college partnerships with businesses, workforce system, etc. • Bonus funding to scale up successful programs • Support for states and localities to attract jobs back to America • Online entrepreneurship programs

6. Obama Higher Education Proposals • Aimed at Higher Education Reform and Containing College Costs • Most Require Congressional Authorization and/or Funding • Principal Components • $1 billion Race to the Top for Higher Education • Modeled after administration’s signature K-12 program • State based, focused on public institutions

7. Obama Higher Education Proposals • $55 million First in the World grant program • Competitive grants, includes private institutions • Modify Campus-Based (Work Study, SEOG, Perkins Loan) Allocations • Formula changed to reward institutions that hold down tuition, graduate more students, provide “greater value” • “College Scorecard” to provide students and families with more information • Includes earnings and employment information; mechanics uncertain

8. Obama Higher Education Proposals • Preventing the student loan interest rate from increasing from 3.4% to 6.8% • Rate increase scheduled to take effect July 1 • House and Senate bills introduced—H.R. 3826, Rep. Courtney (D-CT); S. 2051, Sen. Reed (D-RI) • Making the American Opportunity Tax Credit Permanent (Expires 2012) -- a top AACC and ACCT priority

9. House FY 2013 Budget Resolution • House Passed FY 2013 Budget Resolution as Written by Rep. Paul Ryan (R-WI) on March 29 • Caps Agency Budgets at $1.028 Trillion - $19 Billion Less Than Cap Set by the Budget Control Act in August • Calls for Significant Spending Cuts to Domestic Programs, Restructures Some Entitlement Programs and Lowers Tax Rates • Senate is Not Expected to Pass a Budget Resolution

10. House FY 2013 Budget Resolution • Recommended Changes to Pell Grants • Reverse automatic zero EFC and IPA expansions • No eligibility for less-than half-time students • Eliminate automatic increases in the Pell Grant maximum above $5,550 • Cut all mandatory funding for the Pell Grant program • Eliminate administrative fees for the Pell Grant and campus-based aid programs

11. House Budget Resolution • Other Key Programs • Double interest rate on subsidized Stafford loans (scheduled to happen under current law on July 1) • Eliminate remaining mandatory funding for TAACCCT grants • Eliminate in-school interest subsidies for undergraduate student loans • Cut funding for workforce training

12. Community College Funding Priorities • Pell Grant Program – Maintain Discretionary Maximum Grant With No Program Cuts (Grant increases to $5,645) • Perkins CTE – Provide $1.27 billion • Title III-A, Strengthening Institutions – Increase Funding by $20 m, to $100 million • Adult Education Act – At Least Current $595 m • Workforce Investment Act – Maintain Funding

13. Pell Grant Program Data • Program Grew 142% from AY 2007-08 to AY 2012-13 • More Than 30% of ED’s annual budget • 9.5 million recipients; 3.5 million CC recipients, 36% of total • Program has $1.8 billion surplus for FY 2013 • Hole of ~$7.8 billion in FY 2014

14. Restoration of ATB Eligibility • New “Ability to Benefit” (ATB) Students Taken Out of All Student Aid Programs as of 7/1/12 • Current ATB students grandfathered in • ATB Students Lack High School Diploma or GED • Estimates of Impact on Community College Students is Approximately 40,000 Nationally, Possibly More • Your Voice is Needed

15. Workforce Investment Act • House Education and Workforce Committee Moving Forward with WIA Reauthorization • Committee Markup Likely Soon • Final Passage This Year Unlikely

16. WIA Reauthorization • House Republican Bill – H.R. 4297 • Consolidates 27 current programs into one funding stream distributed by formula to states • Increased focus on business engagement – 2/3 business majority on WIBs • Marginally improves training provider eligibility reporting requirements • Modifies performance indicators and applies them to most WIA programs (including adult ed) • Includes new authority for WIBs to contract with IHEs

17. WIA Reauthorization • House Democrats Bill – H.R. 4227 • Drives planning at regional level • Leaves current boards intact (including community college representation) • Authorizes Obama’s Community College to Career Fund • Line item for infrastructure funding • Exempts public IHEs from training provider eligibility requirements • Senate WIA Reauthorization Effort is Stymied

18. TAACCCT Program • Second Round Solicitation for Grant Applications on February 24, Proposals Due May 24 • Five Core Elements, Some New Emphases • Grants Slightly Smaller Than Last Year • Fiscal Agents from First Round Cannot be Fiscal Agents in Second Round • Program Under Fire in Ryan Budget

19. DOD MOU/Veterans Legislation • AACC and other Higher Education Groups Worked with Dept. of Defense to Modify MOU • All institutions must sign MOU in order to participate in tuition assistance program • Issues in original MOU around credit transfer policies, other institutional prerogatives • DOD agreed to many positive changes, finalizing details for rollout of new MOU • Further information: www.dodmou.com

20. Veterans Protection Legislation • GI Bill Consumer Awareness Act (Murray – S. 2241) and Military and Veterans Educational Reform Act (Webb – S. 2179) • Require VA and institutions to provide substantial information about institutions and programs to vets • Student outcome and other information to empower veterans and members of armed forces to make informed choices • Many requirements problematic • Higher education working with bill sponsors to minimize impact on institutions, make ED source for most information

21. H.R. 2117 • Repeals ED Regulations on Credit Hour and State Authorization • Passed House February 28 • Sponsored by Rep. Foxx, chair of House higher education subcommittee • Opposed by most Democrats • Supported by higher education, including for-profits • No prospects in Senate

22. ED Plan for New Postsecondary Student Success Measures • Outgrowth of Committee on Measure of Student Success • Broad, Ambitious Agenda • Sure to Have Long Bumpy Road to Partial Implementation • Proposed Changes Include: • Transfers included in completion rate

23. ED Plan for New Postsecondary Student Success Measures • Include part-time students • Beef up state longitudinal data systems • Help colleges collect, disclose, and report student learning and employment outcomes • Develop plan for public release of GE data

24. Contact Information • David Baime • 202-728-0200 x224, dbaime@aacc.nche.edu • Jim Hermes • 202-728-0200 x216, jhermes@aacc.nche.edu • Jee Hang Lee • 202-775-4450, jhlee@acct.org • Laurie Quarles • 202-728-0200 x249, lquarles@aacc.nche.edu