Aacc FEDERAL LEGISLATIVE and regulatory Update

1. Aacc FEDERAL LEGISLATIVE and regulatory Update MCCA July, 2014 David Baime Senior Vice President, Government Relations & Policy Analysis American Association of Community Colleges

2. Federal Legislative Overview • Funding/Pell Grant Program Status • HEA Reauthorization • WIA Reauthorization • H.R. 3393 – AOTC Reform • Gainful Employment Regulations • Administration’s Ratings System • Title IX and Related Issues

3. Appropriations & Budget • Under Bipartisan Budget Act, funding levels were set for FY 2014 and FY 2015 and sequestration was partially replaced. Sequestration continues. • Senate Labor-HHS-ED Appropriations Subcommittee approved legislation June 12; further action stymiedby threat of full Committee amendments. • Senate results largely positive with exception of use of Pell Grant (temporary) surplus for other programs. • House markup may take place later in July. • CR for first part of FY 2015 now seems inevitable; and lame duck session afterwards.

4. Pell Grants • The automatic (CPI) increase in the maximum grant for 2014- 15 (starts July 1) brought total to $5,730 – an $85 increase. • Program has a surplus for FY 2015 and 2016; cost has been dropping. Beyond 2017 the program is slated to have significant shortfalls. • Reinstatement of eligibility for Ability-to-Benefit students remains a community college priority and partial restoration in FY 2015 is possible.

5. HEA Reauthorization: general • The Higher Education Act (HEA) was last reauthorized in 2008. Extensive hearing have led to introduction of House and Senate legislation. Legislation will not be enacted in 2014. • Congressional priorities include: • Increasing completion rates • Reducing “cost” • Accreditation reform • Better consumer information • Simplifying student aid programs • Innovative learning models • Regulatory relief (Senate task force established)

6. HEA Reauthorization: aACC Priorities • Pell Grants: Maintain maximum grant without harmful limitations on eligibility; reinstate Ability-to-Benefit & Year-Round Pell eligibility; expand current 12 semester limit; provide some eligibility flexibility for both programs/students (2% of total). • Student Loans: Lower borrowing limits and give colleges authority to reduce loan maximum; “decouple” Pell Grant eligibility from that for loans; restructure loan default rates and penalties. • Affordability & Completion: Stronger state maintenance of effort; bolster articulation agreements to extent possible. • Measurement: Create accurate Federal graduation (combined with transfer) rate.

7. HEA REAUTHORIZATION: Harkin bill • Senator Tom Harkin (D-IA), chairman of the Senate Heath, Education, Labor and Pensions Committee has released a draft comprehensive HEA reauthorization bill. • Staff shared early draft of bill with AACC. Further comments due August 29. • Legislation is ambitious, with major policy changes, far-reaching requirements on institutions, and new programs. • Highlights include year-round Pell reinstatement (but only for full-time students), partial “Ability-to-Benefit” reinstatement. • New programs focused on community colleges: dual enrollment (marred by extensive accompanying requirements) and workforce training program (similar to what might have been included in WIA).

8. HEA REAUTHORIZATION: Harkin bill • New Federal-State partnership program created; bitterly opposed by private non-profits. • New commission to examine success of institutions; would be problematic for community colleges. • Early draft included unit record data system with far-reaching data elements, but was pulled from draft; staff say it will return. • Stands 0.0001% chance of enactment in 2014.

9. HEA REAuthorization: Alexander-Bennett bill • Significant bi-partisan legislation supported by possible chair of HELP Committee in 2015. Overall, quite positive for CCs. • Creates a two-item needs assessment system for Pell Grants, based on income and family size. Waivers permitted. Uses “prior-prior year” IRS data. • Restores year-round Pell Grant. • Allows aid administrators to reduce loan maximums if justified by post-completion earnings.

10. Hea reauthorization: house bills and legislative activity • House Education and Workforce Committee has reported 3 major HEA reauthorization bills, start of piecemeal reauthorization. • Bills approved on bi-partisan basis though Democrats’ amendments were thwarted by Republicans. • Legislation headed to House floor week of July 21. • H.R. 4983 is most important bill, establishing new “College Dashboard” and data to populate it that derives from current IPEDS system. Legislation: • Creates 3 graduation rates (100%, 150% and 200%) that exclude transfers. AACC supports transfer inclusion and 300% window and is working to make changes. • Would report debt levels; link to BLS wages; variety of information on students and student aid. • Bill eschews student unit record data system and eliminates “watch lists.”

11. HEA Reauthorization: house bills and legislative activity • H.R. 4984 creates new counseling requirements for institutions. Changes include annual loan counseling, and specific counseling for Pell Grant recipients (new). • Opposing enhanced counseling is politically problematic but AACC is concerned about institutions’ ability to comply. • H.R. 3136 would create a new competency-based demonstration program at ED. Legislation would allow ED to waive a broad range of statutory and other requirements that limit institutions’ ability to deliver competency-based education. • AACC supports House legislation – but changes are needed. Bills will not be enacted in 2014.

12. Workforce Investment Act (WIA)Reauthorization • Bi-partisan House and Senate negotiations led to agreement in early summer, 10 years after law’s expiration. • Legislation (WIOA) now approved, by overwhelming margins, by both chambers. • Legislation good but not perfect; AACC endorsed. • Highlights include: retains CC role on local boards (and some state boards); increased contracting authority; better integration of adult education into training programs and career pathways. • Imperfections: subsequent trainer eligibility criteria are problematic; community colleges not made full partners in system; no CC-specific program; infrastructure provisions.

13. H.R. 3393 – AOTC Reform • Black-Davis Legislation, H.R. 3393, Student and Family Tax Simplification Act, is headed to the House floor. • Legislation was bi-partisan, growing out of tax reform effort. • Legislation lost Democratic support when income phase-outs were increased, thereby benefitting more students but creating “pay for” issue for Ds. • Loss of bi-partisanship major blow to bill’s prospects. • AACC strongly supports bill, alone among major higher education associations: • It targets aid to needier students with increased refundability. • Resolves issue related to Pell Grant offset that decreases CC awards. • Ends inappropriate subsidies to more affluent students.

14. Gainful Employment NPRM • Regulation largely targeted at for-profit colleges. • Community colleges bear brunt of regulation in non-profit higher education. • GEprograms include all Title IV-eligible certificate (non-degree) programs at community colleges and nearly all educational programs at for-profits.

15. Gainful Employment Metrics • Programs’ Title IV eligibility judged primarily by: • Debt-to-Earnings • Program Cohort Default Rates (pCDR) • Debt-to-Earnings - 30 or More Title IV Completers • pCDR – More Than 30 Title IV Borrowers & > 12% & > 30% > 30%

16. GE – AACC Proposed Modifications • Focus on programs with high indebtedness—just 9% of all CC GE students take out federal loans. • Programs with a median loan debt of $0 should automatically pass debt-to-earnings & pCDRmetrics. • Remove or limit pCDR for programs with low borrowing incidence. • Reduce the burden on smaller programs (majority of CC offerings) by not requiring initial reporting.

17. Obama College Ratings system • Administration currently working on higher education ratings system, to take effect for 2015-16 school year. Draft of system delayed to this fall. • Serious effort with extensive stakeholder input. • Proposal calls for eventually tying federal aid to the ratings system; this requires Congressional action. • AACC does not support ratings system – not an appropriate federal role and not relevant to most community college students.

18. Title IX and Sexual Assault • The issue of sexual assault on college campuses has reached a fever pitch. • Community colleges are not a primary focus, but are deeply implicated • Colleges remain responsible for Title IX compliance. Compliance with complicated law can be difficult. • Colleges also must report information under Clery Act, and new regulations on the Violence Against Woman Act are forthcoming. • Senators McCaskill and Gillibrand have held 3 roundtables; circulated survey on campuses sexual assault, etc., and released results; will be introducing legislation. • AACC establishing legal advisory panel to help guide activity.

19. Thank You