Legislative News RSS
Obama Administration's Plans to Improve 529 College Savings Plans for the Middle Class
The Obama administration's Middle Class Task Force held a press conference on Sept. 9 to highlight some of its findings and goals to expand education and lifelong training opportunities. Making Section 529 college savings plans more accessible, effective and reliable for the middle class is one way the task force proposes to expand higher education opportunities. At the Sept. 9 press conference, the task force released a report that assessed the effectiveness of the current 529 program and provides recommendations to better accomplish the administration's goals.
House Panel Considers Allowing Private Loans to Be Discharged in Bankruptcy
The House Judiciary Committee yesterday held a hearing on bankruptcy law as it applies to private student loans. Before the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, private student loans were unconditionally dischargeable in bankruptcy. However, the 2005 law gave private loans the same preferred treatment as government-guaranteed student loans so they are now not dischargeable except under very extreme circumstances. During yesterday's hearing, Rep. Steve Cohen (D-TN) signaled his intention to sponsor legislation to revise the bankruptcy provisions for private student loans to make them dischargeable again.
FY 2010 Federal Budget Update
As the end of the 2009 fiscal year draws near, Congressional leaders are openly talking about stopgap legislation to keep the government operating for an additional 30 days. Yesterday, House Majority Leader Steny Hoyer (D-MD) said that the House will pass a continuing resolution this week that would keep the government funded at current levels through Oct. 31.
Congress to Hold Hearings on Non-Profit Schools (Associated Press)
"Rep. George Miller, D-Calif., who heads the House Education Committee, said Monday that a Government Accountability Office report on proprietary schools is 'extremely troubling and warrant(s) further examination by Congress,'" the Associated Press reports. "The report found that many proprietary schools admitted unqualified students who had a greater tendency than other students to drop out, let students stay enrolled despite a lack of academic progress, and also misrepresented themselves to prospective students. ... His panel's Subcommittee on Higher Education, Lifelong Learning, and Competitiveness plans hearings on the GAO findings, according to the subcommittee's chairman, Rep. Ruben Hinojosa, D-Texas."
Mass. Senate Approves Filling Kennedy Seat (Reuters)
"The Massachusetts Senate voted on Tuesday to allow the governor to name an interim U.S. Senate replacement for the late Edward Kennedy and fill a key 60th seat for the Democrats," Reuters reports. "The bill now requires a final vote in both chambers and a signature from Governor Deval Patrick, a Democrat who backs the legislation. Patrick is expected to name a replacement for Kennedy within days, returning the Democrats to a crucial 60 seats in the U.S. Senate.
NASFAA Releases Summary of H.R. 3221 as Passed by the Full House
On September 18, the House passed the Student Aid and Fiscal Responsibility Act of 2009 (H.R. 3221) by a vote of 253 to 171. The bill would use savings from eliminating the Federal Family Education Loan Program (FFELP) to bolster the Pell Grant program, fund a new Federal Direct Perkins Loan program, and increase funding in other higher education and K12 programs. The bill was introduced to the House Education Committee on July 15th. Since then, the bill has been amended twice -- once through committee markup and again during a full House debate. This article contains a comprehensive summary of the student aid provisions contained in the bill as reported by the full House.
GAO Report on Proprietary School Aid Recommends Stronger Oversight by Department
A new report on student financial aid practices at proprietary schools released by the General Accountability Office (GAO) concludes that the Department of Education should strengthen its monitoring and oversight of institutions in the for-profit sector. The study, Proprietary Schools: Stronger Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid, found areas of fraud and abuse in the "ability-to-benefit" and high school diploma requirements and linked these weaknesses to the potential for greater default rates in unqualified students who do not succeed in college because they are not adequately prepared.
Houses Passes Student Aid and Fiscal Responsibility Act with Amendments
The House of Representatives passed H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, this afternoon by a 253 to 171 vote. The bill would use savings from eliminating the Federal Family Education Loan Program (FFELP) to bolster the Pell Grant program, fund a new Federal Direct Perkins Loan program, and increase funding in other higher education and K12 programs. "While the Student Aid and Fiscal Responsibility Act is not the perfect bill, it demonstrates that lawmakers and the Obama administration are committed to removing financial barriers to higher education to ensure students realize their potential and help the U.S. remain a leader in the global economy," NASFAA Interim President and CEO Joan Crissman said in a statement. "We look forward to working with lawmakers to improve this bill as it moves through the legislative process."
H.R. 3221 Headed to House Floor with Amendments
Late yesterday afternoon, the House Rules Committee released rules for the upcoming House debate of H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA). Of the 45 amendments submitted for consideration, only 24 were deemed eligible for consideration for the debate that is expected to begin as early as today. In a victory for part-time students, one NASFAA amendment - originally sponsored by Rep. Dave Loebsack (D-IA) -- has been accepted into the manager's amendment. The amendment would ensure that part-time students can also take advantage of year-round Pell Grants, something the Department of Education has proposed to prohibit in proposed regulations.
Obama Administration Expresses Support for Student Aid and Fiscal Responsibility Act
The Obama administration expressed strong support for H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA), in a Statement of Administrative Policy issued as the House prepares to begin debating the bill today and is expected to pass the bill on Thursday. The statement highlights the aspects of the bill that the administration supports and some areas where the administration hopes Congress will improve the bill as it moves through the legislative process.
CBO Says Lending Community's Loan Proposal Costs More Than Direct Lending
The Congressional Budget Office (CBO) released its scoring of the lending community's alternative student loan proposal on Friday, showing that it would cost $13 billion more over ten years than the Democrats' proposal to originate all loans through the Direct Loan Program. The net savings from turning to 100 percent Direct Lending is $80 billion whereas the net savings from the lenders' alternative proposal is $67 billion, according to CBO.
CBO Estimates Increased Costs on Pell Grant Proposal
In response to a request from the ranking member of the House Education Committee John Kline (R-MN), the Congressional Budget Office (CBO) issued revised estimates yesterday on the cost of increasing and indexing the Pell Grant as proposed in the Student Aid and Fiscal Responsibility Act (H.R. 3221). The revised estimate adds an additional $11.4 billion over ten years to the original projections. The increase is based on new data released by the Department of Education that shows rising numbers of students participating in the Pell Grant program. The CBO also believes that the Consumer Price Index (CPI) -- the index that will determine future mandatory increases in the Pell Grant -- will be slightly higher than expected.
Report Outlines Impact of Obama's FAFSA Simplification Proposals
The need to simplify the federal financial aid application and the potential impact of President Obama's proposals to simplify the FAFSA are detailed in a new report by the Council of Economic Advisers (CEA) and the National Economic Council (NEC). The current aid application process discourages more than one million students who would likely qualify for aid from applying and provides opportunities for applicants to game the system while penalizing other families for saving for college, according to the report. The report also found that the Obama administration's proposal to eliminate asset and income questions that are not required by the IRS would have a minimal effect on the distribution of aid.
Harkin to Become Chairman of Senate HELP Committee
Sen. Tom Harkin (D-IA) accepted the chairmanship of the Senate Health, Education, Labor, and Pensions (HELP) Committee yesterday, a position left vacant after the passing of Sen. Edward Kennedy (D-MA). While Harkin raised concerns about the President's proposal to make the Pell Grant a full entitlement, he has historically been a supporter of the program and he is expected to carry through with the President's proposals to restructure the student loan programs and increase funding for the Pell Grant.
The Final Push to Overhaul Student Lending
Congress returns from its August recess this week to tackle an ambitious agenda that includes Democrats' efforts to overhaul the student loan programs by eliminating the Federal Family Education Loan Program (FFELP) and restructuring the Perkins Loan Program. The Obama administration's student loan proposal -- used as the template for the Student Aid and Fiscal Responsibility Act (H.R. 3221) -- would be the most dramatic overhaul of the student loan system since the creation of the Direct Loan Program more than a decade ago. However, Democrats must overcome some serious challenges to pass the bill.
House Education Committee's Top Republican Urges Delay of Student Aid Fiscal Responsibility Act
The House Education and Labor Committee's ranking Republican, Rep. John Kline (R-MN), urged Democrats to slow down the process to overhaul the student loan programs because new budget projections show that changing enrollment and economic trends could increase the cost of the Pell Grant program by $27 billion. House Education and Labor Committee Chairman George Miller's (D-CA) staff disputed Kline's assessment of the new projections, arguing that the re-estimates show a greater need to invest in Pell because of more students need the grant aid.
CBO Issues Budget Estimate on HEOA Technical Amendments
The Congressional Budget Office (CBO) last week issued budget estimates for H.R. 1777 (enacted as Public Law 111-39 on July 1, 2009) which amends the Higher Education Act of 1965. The bill made changes to the federal student loan programs; directly appropriated more money for the mandatory portion of the Federal Pell Grant Program; and created a new mandatory grant program, Scholarships for Veterans' Dependents. The CBO estimates that H.R. 1777 will reduce direct spending by $3 million over the 2009-2014 and $1 million over the 2009-2019 periods.
CBO Director Adds New Fuel to the Debate on FFELP/DL Budget Scoring
On Monday, Congressional Budget Office (CBO) Director Douglas Elmendorf issued a revised estimate on the savings that would come from eliminating the Federal Family Education Loan Program (FFELP). "CBO found that after accounting for the cost of such risk ... the proposal to replace new guaranteed loans with direct loans would lead to estimated savings of about $47 billion over the 2010-2019 period - about $33 billion less than CBO's estimate under standard credit reform treatment," Elmendorf wrote. Republicans and Democrats quickly issued statements on the letter.
Senate Panel Pushes Forward With Education-Spending Bill (The Chronicle of Higher Education)
"The maximum Pell Grant would increase by $200, to $5,550, in the 2010-11 academic year under a $163-billion spending bill approved today by the U.S. Senate Appropriations subcommittee on labor, health, and education," The Chronicle of Higher Education reports. "Subcommittee members this afternoon thanked one another for their work on the bill and quickly pushed forward the legislation, which largely mirrors a House version passed last week. The Senate version would cost $2.5-billion more than the House version, but would spend slightly less on the National Institutes of Health."
U.S. Rep Miller Defends Student Loan Bill (Reuters)
"The sponsor of a bill in the U.S. Congress to reshape the $92-billion student loan market told Reuters on Tuesday it will come to a vote soon and he disputed claims that its federal budget savings are overblown," Reuters reports. "Representative George Miller, the Democratic chairman of the House of Representatives Education and Labor Committee, accused Republican critics contesting earlier budget savings estimates of 'yet another predictable political gimmick.' In an exclusive interview, Miller said 'We are getting ready to take (the bill) to the floor of the Congress, probably right after the August break.'"
Congressional Group Urges House Education Committee to Preserve Aspects of FFELP
Thirty-one members of Congress are urging the House Education and Labor Committee to preserve certain aspects of the FFEL program when it marks up the 2010 Budget reconciliation bill, an action it is expected to undertake very shortly. In letters to Chairman George Miller and Ranking Member John Kline, a group of Republican and Democratic congressional members expressed concern over the effects of an abrupt termination of the FFELP program. Citing possible job losses in the loan business as well as disruption of servicing and administration at schools that don't currently participate in Direct Lending, the group recommended that the education committee consider alternatives to ending the FFELP and explore the creation of a new private sector-based loan financing facility.
HEA Technical Corrections Bill Adopts Provisions Advocated by NASFAA
The HEOA Technical Corrections Bill (H.R.1777) passed by the House and Senate on Tuesday and expected to be signed into law by the President includes several provisions advocated by NASFAA. Most notably the bill doesn't make the Department's proposed changes to the "Master Calendar" requirements, excludes EFC from information that must be given to students for the self-certification form, moves the date that VA benefits are excluded from estimated financial assistance up to July 1, 2009, allows lenders and guaranty agencies to provide entrance counseling, expands the Departments loan purchasing authority to allow it to buy rehabilitated loans, and extends the operation of experimental sites that have not been deemed "successful" to June 30, 2010.
Defense Department Releases GI Bill Transferability Policy
The Defense Department announced yesterday its policy for transferring educational benefits to the spouses and children of service members under the Post 9/11 GI Bill, which takes effect Aug. 1, 2009. Career service members on active duty or in the selected reserve on Aug. 1, 2009, and who are eligible for the Post-9/11 GI Bill may be entitled to transfer all or a portion of their education entitlement to one or more family members. The guidance just released refers to the transferability of benefits provisions in the original Post-9/11 GI Bill. The 2009 Supplemental Appropriations bill, which is now awaiting signature by President Obama, extends transferability further, allowing children to use Post-9/11 GI Bill benefits that could have been transferred to them if their military parent had lived.
House and Senate Pass HEA Technical Amendments Bill
The House unanimously approved legislation (H.R. 1777) yesterday that makes technical amendments to the Higher Education Act. The House approval came after the Senate unanimously approved the bill earlier in the day. The House and Senate's action clear the bill to be signed into law by President Obama. The text of the bill is not yet available, but NASFAA expects to publish additional details about the bill in tomorrow's Today's News as the text becomes available.
CBO Revised Budget Estimate Slightly Lowers Projected Savings from Eliminating FFELP
Yesterday, the Congressional Budget Office released updated estimates on the costs and savings of generated from the president's budget request. The estimated savings from eliminating the Federal Family Education Loan Program (FFELP) decreased slightly from earlier estimates from $94 billion to $87 billion. The updated estimates will make it harder to implement President Obama's proposal for a mandatory Pell grant. Instead, Democratic leaders are expected to push legislation that uses savings from eliminating FFEL to increase mandatory Pell spending.
NASFAA Summer Legislative Update
Congress has just eight weeks to tackle a very aggressive legislative agenda before they are scheduled to break for August recess. This legislative agenda includes two pieces of legislation that will have an impact on higher education: the Technical Amendments Bill (H.R. 1777) and the budget reconciliation legislation which is expected to include significant changes to student aid. The Obama administration has asked Congress to eliminate the FFEL program to offset increases in the Pell Grant.
Appropriation Committee Democrats Express Concern About Making Pell Mandatory
The Chairmen of the House and Senate Appropriations Subcommittees on Labor, Health and Human Services and Education both expressed concerns yesterday about the Obama administration's proposal to make Pell Grants a mandatory spending program during separate hearings with Education Secretary Arne Duncan. House Subcommittee Chairman David Obey (D-WI), who is also chairman of the House Appropriations Committee, said that he had some misgivings about making Pell mandatory because he thought it would not be fiscally responsible. Senate Subcommittee Chairman Tom Harkin (D-IA) told Duncan that he supported the administration's proposal to administer all loans through the Direct Loan program, but would need to discuss the administration's proposal to make Pell mandatory because committee members and other Senators had some concerns.
House Education Committee to Hold Hearing on Loan Reform
The House Education and Labor Committee announced that it will hold a hearing titled, "Increasing Student Aid through Loan Reform" on May 21 at 10:00 a.m. EDT. Witnesses for the hearing have not yet been announced. The Committee is expected to broadcast the hearing live online.
NASFAA Opposes Department of Ed's Proposal to Alter the Master Calendar
NASFAA sent a letter yesterday to education leaders in the House and Senate urging them not to adopt an amendment proposed by the U.S. Department of Education to change "Master Calendar" requirements as part of H.R. 1777, a bill to make technical corrections to the HEA. The HEA currently requires that regulations implementing the student aid programs under Title IV of the HEA that are published on or before November 1 of a given year do not take effect until July 1 of the next year - a delay of eight months after promulgation. Duncan proposed to limit the application of this requirement to only those regulations that affect the calculation of grant, loan, or work assistance under those programs.
House Panel Backs Increased Aid to Adult-Education Programs (The Chronicle of Higher Education)
"College officials and adult students, including a well-known country singer, argued for increases in federal funds for job training and adult education in a Congressional hearing on Tuesday. And the lawmakers appeared sympathetic to their pleas," The Chronicle of Higher Education reports. "A House of Representatives education subcommittee held the session as Congress prepares to renew the Workforce Investment Act, which governs job-training grants to colleges. Members of the panel asked both the educators and the students how to improve the adult-education system."
In Looming Showdown Over Loans, Obama Turns to Students for Support (The Chronicle of Higher Education)
"In an e-mail message titled 'Students Deserve Better,' the Democratic National Committee is asking college students who backed Barack Obama in the 2008 election to send letters to Congress in support of his plan to end the bank-based guaranteed-loan program," The Chronicle of Higher Education reports. "'You know how important financial assistance is for students across America who dream of a brighter future,' the message says. 'That's why we need your help to fix a broken system.' It continues, 'The special interests - bankers, lenders, and their lobbyists - are lining up against this plan. ... Stand with the president now.'"
Student-Loan Program on Chopping Block (The Denver Post)
"Lenders and schools in Colorado are fighting to save a program that once accounted for more than 80 percent of federal student loans in the state," The Denver Post reports. "Eliminating the program, which guarantees student loans that banks, Sallie Mae and state-affiliated student lending arms such as CollegeInvest provided, could save taxpayers $94 billion over 10 years in lower costs and higher interest income, according to estimates from the Congressional Budget Office. ... But eliminating FFELP would leave students with fewer borrowing options, reduce the customer service they receive and potentially contribute to higher defaults, backers of the current program argue."
Tuition-Free Public Service Academy Bill Reintroduced
Congressman Jim Moran, (D-VA), reintroduced legislation last week that would create a U.S. Public Service Academy modeled after the current military service academies at West Point, Annapolis and Colorado Springs. The United States Public Service Academy Act (H.R. 2102) would create an undergraduate institution designed to cultivate and groom a new generation of young leaders dedicated to public service. The Public Service Academy would offer four years of tuition-free education in exchange for five years of civilian service following graduation. Eligible fields of service would include public education, public health, law enforcement, and government.
