The Higher Education Act of 1965 is an essential piece of legislation that authorizes federal student aid programs, provides institutional aid and support, and includes general provisions pertaining to higher education on anti-discrimination, program integrity, and other issues. The HEA was last authorized in 2008 and while on slightly different paths, both Sen. Lamar Alexander (R-TN), chair of the Senate Committee on Health, Education, Labor and Pensions, and Rep. Bobby Scott (D-VA), chair of the House Education and Labor Committee, have recently put forth their proposals for an overhaul of higher education in the United States.
On Sept. 26, Alexander released a package of bills, The Student Aid Improvement Act of 2019, that addresses several items within the HEA. A few weeks later, on Oct. 15, House Democrats unveiled their plan for reauthorizing the HEA, named the College Affordability Act. NACUBO, along with 32 other higher education associations, signed on to a community letter addressing areas of support and concern in the CAA (H.R. 4674), which is a comprehensive 1,200-page bill. Alexander’s plan (S. 2557), on the other hand, includes eight pieces of legislation and primarily focuses on student aid provisions.
Democrats’ Plans
One of the stated key goals of the CAA is to address and lower the cost of college. The CAA "is a responsible, comprehensive overhaul of our higher education system that would mean students can spend less and earn more," said Scott in a press release, adding "this proposal immediately cuts the cost of college for students and families and provides relief for existing borrowers."
First, the legislation would establish the America’s College Promise program, a federal-state partnership to provide tuition-free community college. Participating states would be required to waive all community college tuition and fees, agree to provide certain student services, and implement requirements for pathways between two- and four-year institutions. In return, the federal government would cover 75 percent of the average resident community college tuition and fees, adjusted annually by whichever is lower, CPI or 3 percent.
The CAA would also increase the maximum Pell Grant award by $625, index future awards to inflation, extend the eligibility window to 14 semesters, and permit students to put unspent Pell dollars toward a graduate degree. Additionally, the interest subsidy on federal graduate student loans would be reinstated.
Under the CAA, repayment plans would be simplified, with one fixed plan and one income-based repayment plan, with Parent PLUS Loans eligible for an IBR plan. The IBR plan would also allow borrowers earning less than $31,225 to repay $0 per month until their earnings increased and would forgive any remaining debt after 20 years of repayment.
The CAA would establish a Federal Direct Perkins Loan Program to replace the previously expired Perkins program. While the program would receive an annual allocation of $2.4 billion, the bill does not allow for loan servicing to remain at the local level, where it would be conducted and controlled by individual institutions, as was the case under the previous Perkins program. Perkins loans under the CAA would have the same terms and conditions as unsubsidized Direct Stafford loans, but with a 5 percent fixed interest rate.
Other student aid provisions would eliminate loan origination fees, allow borrowers to refinance their federal loans, and set minimum standards and clarifications for institutions’ net price calculators.
The CAA also aims to increase education quality by establishing a repayment metric to measure the percentage of students paying at least 90 percent of their monthly payments over three years. Students with a balance of zero, including those with a zero-dollar payment under IBR or those in certain types of forbearance and deferment, would be considered paid. Institutions that fail this metric could lose eligibility to participate in Title IV programs. Further, the CAA would require schools to disclose to students and prospective students when noninstructional spending increases by more than 5 percent.
Democrats, critical of the Trump administration’s recommendations concerning campus sexual assault, have included a provision that would prohibit the Department of Education from issuing or enforcing the Title IX rules proposed in November 2018 or substantially similar regulations. Additionally, the CAA would codify a ban on predispute arbitration.
Finally, the Democrats’ bill would amend the Family Education Rights and Privacy Act to allow for reverse transfer, enabling institutions to award students the degrees they have earned even after those students transfer to another institution.
Sen. Alexander’s Approach
While the CAA is a bill written solely by House Democrats, Alexander’s approach in The Student Aid Improvement Act of 2022 is slightly different. He has packaged together eight higher education bills, with some measure of input from both parties in the hopes of receiving enough support from across the aisle to pass this set of bills in the Senate.
Many of the components of Alexander’s plan are similar to those included in the CAA—simplification of the Free Application for Federal Student Aid, Pell Grants for parole-eligible prisoners, and an increase to the maximum Pell Grant award, though by only $20. While the Student Aid Improvement Act and the CAA both call for Pell Grants to be used for high-quality short-term programs that partner with local industry, Alexander’s proposal would also allow programs at for-profit institutions to be eligible for this award.
Where There’s Agreement
Simplifying the FAFSA has long been one of Alexander’s goals, and both parties concur that the number of questions on the application should be reduced. But while many in Washington agree that the FAFSA could be shortened, states often use information collected on the application when determining state-level financial aid, and some caution that oversimplifying it would shift some of the burden of data collection to the states.
Both proposals also call for permanently reauthorizing mandatory funding for historically black colleges and universities, tribally controlled colleges and universities, and other minority-serving institutions.
The CAA would eliminate the ban on a student unit record system, which would allow the Department of Education to collect student-level data and develop a secure system to evaluate postsecondary outcomes including transfers, employment, and earnings. While not included in Alexander’s legislative package, he did comment in remarks on the Senate floor that a unit record system should be considered as his legislation moves forward.
Where Do We Go From Here?
Democrats on the House Education and Labor Committee passed the CAA on Oct. 31 along party lines by a 28-22 vote. The legislation will now go to the House floor, where Scott says he hopes to see it passed by the end of 2019, though Congress breaks for the winter recess on Dec. 13 and passage of appropriations bills to fund the federal government will likely command much of Congress’ attention during this period.
Given that 2022 is an election year, it is unclear if both chambers of Congress will be able to pass an HEA reauthorization to present to President Donald Trump for his signature. And because both chambers are taking different approaches—with Senate Republicans inclined to pass smaller pieces of legislation and House Democrats wanting a comprehensive bill—it becomes even less likely that there will be an agreement.
NACUBO will continue to monitor HEA reauthorization and any additional proposals offered by Republicans, Democrats, and Washington think tanks. Click here to stay informed about HEA reauthorization.
NACUBO CONTACT Bryan Dickson, assistant director, advocacy and student financial services