Reauthorization of the Higher Education Act

1. The National Association of Student Financial Aid Administrators Reauthorization of the Higher Education Act WFAA Conference 1

2. Reauthorizationof Higher Education Act • Law mandates reauthorization every 5-7 years • Higher Education Opportunity Act passed in 2008 • Reauthorization should occur in 2014 • It won’t happen on time • The process has started, but there will not be a final bill • Predictions on timing • An automatic one-year extension will be granted at end of 2014 • Initial legislation has been released in both House and Senate, but markups are unlikely in this Congress • Election recess and a lame duck Congress will slow progress • Maybe start to see real movement in spring of 2015

3. NASFAA’s Reauthorization Task Force • Began work in January 2012 • Consisted of 17 members from all sectors and regions • Forty listening sessions around the country

4. Total Comments

5. NASFAA’s Reauthorization Task Force • Developed 60 comprehensive recommendations approved by the NASFAA Board • Recommendations submitted to both the House and Senate Education Committees in the fall of 2013 • Document will continue to be updated, as the timetable for reauthorization is fluid

6. RTF Spin-off Task Forces Public Service Loan Forgiveness Task Force • Report released in July 2014 • Key recommendations to strengthen the PSLF program • Forgiveness limits: 100% up to $57,500 and 50% of remainder up to $138,500 total forgiveness • Keep untaxed • Increase awareness • Make data public

7. RTF Spin-off Task Forces Consumer Information Task Force • Report released in August 2014 • Key recommendations to improve consumer information • Eliminate annual notice and use College Navigator • Repeal student unit record ban • Examine usefulness of campus safety and fire safety reports, etc. • Eliminate non Title IV-related disclosures (e.g., Constitution Day, voter registration, etc. • Exempt graduate programs from inapplicable requirements • Require consumer testing for all new consumer information requirements

8. RTF Spin-off Task Forces Campus-Based Allocation Formula Task Force • Report released in August 2014 • Four recommendations to modify the campus-based aid allocation formula • Reconstruct income bands to more accurate reflect student need • Eliminate the base guarantee with phase-in protection • Restructure FSEOG fair share formula to be based on Pell funding received by institution with phase-in protection • Increase the assumed self-help for undergraduates in FWS and Perkins fair share formulas from 25% to 35% with phase-in protection

9. RTF Spin-off Task Forces Task forces starting work in fall 2014 • R2T4 • Competency-Based Education

10. Higher Education Affordability Act • Senate Democrats’ first draft of reauthorization bill • HEAA introduced on June 25th • Key provisions: • PPY • Year-round Pell • Eliminates student loan origination fees • Early notification of potential financial aid packages • Streamline repayment programs: a 10-yr plan, and an income-based plan • Borrowers more than 150 days delinquent auto-enrolled in IBR • Full school certification of private loans • Private student loans can be discharged in bankruptcy

11. Senators Alexander/Bennet FAST Act • Financial Aid Simplification and Transparency (FAST) Act • Introduced on June 19th • Eliminates the FAFSA • Only asks for a student’s family size and adjusted gross income from two years prior  • Implements a one grant/one loan system • Streamlines the repayment process into two programs: • A standard 10-year repayment and an income-based repayment • Introduces a “look-up” table that uses family size and PPY to find the Pell Grant award amount • Provides early information to students and families • Institutional authority to limit loans

12. House GOP Reauthorization • Released four bills: • Simplifying the Application for Student Aid Act • Empowering Students Through Enhanced Financial Counseling Act (Passed) • Strengthening Transparency in Higher Education Act (Passed) • Advancing Competency Based Education Demonstration Project Act (Passed) • These bills begin to address the committee’s four guiding principles: • Empowering students and families to make informed decisions • Simplifying and improving student aid • Promoting innovation, access, and completion • Ensuring strong accountability and a limited federal role

13. House GOP Reauthorization • Simplifying the Application for Student Aid Act • Mandates the use of PPY income in federal need analysis • Not yet marked up • Strengthening Transparency in Higher Education Act • Replaces College Navigator with a new site called College Dashboard • ED would maintain the site, and it would have institutional level information related to basic facts about an institution, such as: sector, web address, enrollment, completion, costs, financial aid, and cohort default rates • Passed the full House

14. House GOP Reauthorization Empowering Students Through Enhanced Financial Counseling Act • Replaces one-time entrance counseling requirement with annual counseling that must be completed before student accepts the loan • Passive confirmation of loans would no longer be allowed • Exit counseling is expanded to include borrower-specific information Calls for annual counseling of Pell recipients • ED required to offer consumer-tested, on-line counseling • Requires Parent PLUS counseling • Passed the full House

15. Other Reauthorization Marker Bills • What is a marker bill? • Legislation that gets introduced to promote an idea or set of ideas, but without the intent of immediate Congressional action • Recent marker bills: • Pell Grant Protection Act (Sen. Hirono) • Student Loan Borrower Bill of Rights (Sen. Durbin) • Bank on Students Emergency Loan Refinancing Act (Sen. Warren) • CHANCE Act (Sen. Landrieu) • Simplifying Financial Aid for Students Act (Sen. Booker) • College Affordability & Innovation Act (Sens. Murphy & Schatz) • It’s clear that Congress is interested in student aid issues

16. Other “Hot Topics” for Reauthorization • What is going to happen to the undergraduate interest subsidy? • What is going to happen to the Campus-Based Loan programs, including the Perkins Loan Program? • What will be done to address regulatory burden?

17. Questions? Email: policy@nasfaa.org