HEA REAUTHORIZATION UDPATE

1. HEA REAUTHORIZATION UDPATE 2013 Fall IASFAA Dubuque, Iowa

2. REAUTHORIZATION FLOWCHART • The process to make changes/additions/deletions to HEA. • Reauthorization review performed by: • House Committee on Education & Workforce • Sub-committee on Education Reform • Senate Committee on Health Education, Labor & Pension • Subcommittee on Education • After the hearings, staff member on each sub-committee • develop draft legislation. • Full Committee generally debates technical amendments to • the draft bill.

3. REAUTHORIZATION FLOWCHART (cont.) • Both the Senate and House create their own draft bills, • sometimes containing very different provisions. • Once the bill has been signed into Law, the Department • of Education then drafts new regulations based on the bill • written by Congress and signed by the President and • published in a “Notice of Proposed Rule-Making (NPRM) • in the Federal Register. • Negotiated Rulemaking Committees • The Reauthorization Process should follow the same • pattern very five to six years, but each reauthorization • year is different.

4. What the Process Really Looks Like

5. What to Expect This Time? • Congress will look for new ways to hold colleges/ • universities accountable for their costs and • outcomes • Changes to the accreditation system • Expansion of Gainful Employment • Student Debt reduction initiatives • Promote new, cheaper models of learning • Changes to the federal funding system to address • the Pell Shortfall

6. PELL RECOMMENDATIONS • Make a true entitlement • Apply inflation adjustment • Eliminate statutory language the bars participation of • institutions due to high default rates. • Eligibility beyond six (6) year LEU • Determine on a case-by-case basis, if student/school can demonstrate that the student can complete degree within one additional period of enrollment. • Reinstate year-round Pell without the acceleration clause.

7. LOAN RECOMMENDATIONS • Interest rates • Elimination of loan fees • Increased flexibility to reduce loan amounts • Eliminate loan proration • Separate Grad PLUS from Parent PLUS • Increase annual and aggregate loan limits • Simplify subsidized/unsubsidized structure • Allow unequal disbursements • Incentives for repayment • Allow late origination up to 30-days after last day of • enrollment

8. LOAN RECOMMENDATIONS (cont.) • Consolidation • Single holder/single payment • Allow consolidation to prevent borrow defaults • Separate refinance options from consolidation • Weighted average interest rate • Loan Subsidies • Continue need-based borrower subsidies • Remove 150% limit

9. CAMPUS BASED RECOMMENDATIONS • Allocation formula • More flexibility in the transfer of funds • Distribution of Perkins Fund Assists if the Program Ceases • Work-Study • Expand definition of Community Service • Revised community service requirement • Eliminate the 25% cap on private sector employment • FSEOG • Restrict to students whose EFC falls into the Pell • Eligibility range • Eliminate requirement that must be awarded to • students with the lowest EFC

10. NEED ANALYSIS RECOMMENDATIONS • Separate Need Analysis for Pell Grant • Prior-Prior (PPY) Data • Eliminate dislocated worker criterion for Auto Zero • Eliminate simplified needs test • Clarify institution’s authority to reduce non-tuition • cost of attendance components for less-than-full- • time enrollment • Eliminate homelessness from automatic • independent criteria

11. NEED ANALYSIS RECOMMENDATIONS (cont.) • Single methodology and application limits use of • FAFSA by States and institutions • Household size • Reflect regional cost-of-livings in Income • Protection Allowance (IPA) • Treatment of Unmarried Partners or Same Sex • Couples • FAFSA Simplification

12. NEED ANALYSIS RECOMMENDATIONS (cont.) • Utilize the IRS1040 as the federal application • Federal Methodology (FM) EFC Formula • Eliminate small business exclusion from assets • Eliminate exclusion of farm value from assets. • Require foreign income as untaxed income • IRS/FAFSA Data Exchange

13. R2T4 RECOMMENDATIONS • Restrict to undergraduate students • Narrow definition of attendance • Eliminate “intent to withdraw” rules • Simplify pro-rate approach • Better define areas which the institution has sole • discretion • Restore discretion of post-withdrawal • disbursements

14. R2T4 RECOMMENDATIONS (cont.) • Modify the assumption that Title IV aid is applied • to institutional charges first • Allow more time to process R2T4 • Amend the order of return language • Direct Ed to seek public input on way to decrease • the burden and complexity of R2T4

15. GENERAL PROVISIONS RECOMMENDATIONS • Time limit for providing final report of ED Program • Reviews • Overaward Tolerance • Reinstate 6-unit of college coursework provision in • Ability-to-Benefit provisions • Eliminate Selective Service Registration

16. GENERAL PROVISIONS RECOMMENDATIONS (cont.) • Standardize rules for reinstatement of eligibility • I-9 Employment Eligibility Verification • Non-automatic allowable charges opt-out option

17. CONSUMER INFORMATION RECOMMENDATIONS • Require effectiveness study • Consumer Loan Information • Better align timing • Have counselors available • Advisory panel • Decouple Constitution Day, Voter Registration and • Athletic Disclosures • Eliminate requirement to provide state grant • assistance information

18. WHAT’S NEXT? • ED Forums on College Affordability • Comment on floated proposals when asked • Gather and share student stories that show how the • proposals will affect your students • Contact members of Congress as issues are floated • Respond to Notice of Proposed Rulemaking • Respond to Neg Reg Issues