HEA REAUTHORIZATION UDPATE

2013 Fall IASFAA Dubuque, Iowa

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.•

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.

What the Process Really Looks Like

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

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.

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

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

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

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

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

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

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

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

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

GENERAL PROVISIONS RECOMMENDATIONS (cont.)

• Standardize rules for reinstatement of eligibility • I-9 Employment Eligibility Verification• Non-automatic allowable charges opt-out option

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

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