HEAA: Senate HELP Committee Introduces Reauthorization Discussion Draft

 Reauthorization - Masthead 

By Megan McClean, Policy & Federal Relations Staff 

Yesterday Chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP), Senator Tom Harkin (D-IA), introduced a comprehensive Higher Education Act reauthorization bill. The Higher Education Affordability Act (HEAA) includes several provisions for which NASFAA has been advocating, including using prior-prior year (PPY) income in need analysis and reinstating year-round Pell. HEAA , which takes the form of a discussion draft, marks the HELP Committee’s first step toward reauthorization and focuses on four major themes and goals:

  • Increasing college affordability;
  • Helping struggling borrowers;
  • Strengthening accountability; and
  • Improving transparency.

 Provisions related to college affordability: 

  • Reinstate the year-round Pell Grant while giving the institution the ability to determine the award-year assignment of crossover periods
  • Eliminate of the origination fees on Federal Direct student loans
  • Create several partnerships in order to encourage collaboration between the state and federal governments and community colleges and industries
  • Foster dual enrollment and early college high school programs in order to allow students to begin obtaining college credit prior to postsecondary enrollment

Provisions related to student loans and indebtedness 

  • Streamline repayment programs into one single income-based repayment (IBR) option while maintaining a 10-year repayment option; borrowers who are at least 150 days delinquent would automatically be placed into IBR
  • Allow private loans to be discharged in bankruptcy
  • Strengthen loan servicing standards and reform collections processes to reduce existing harmful fees 
  • Require mandatory school certification of private student loans and the inclusion of private student loans and loans made under Titles VII and VIII of the Public Health Service Act in the National Student Loan Data System (NSLDS)

Provisions related to institutional accountability:

  • Institute two loan repayment rates, an institutional loan repayment rate and an individual borrower repayment rate, to be used for disclosure purposes only
  • Establish a “risk-sharing” commission to explore ways in which low-performing institutions could be held financially responsible for poor outcomes
  • Change the current 90-10 rule for for-profit institutions to 85-15
  • Specify that incentive compensation rules apply to all employees at an institution
  • Develop a federal student complaint system to help students find relief and to track harmful practices
  • Prohibit schools from spending federal education dollars on advertising and marketing

Provisions related to transparency: 

  • Provide early notification of potential financial aid awards to middle and high school students and families 
  • Utilize prior-prior year (PPY) in need analysis so that students may apply for financial aid earlier
  • Provide better information to student and parents up front, including debt-to-earnings ratios
  • Mandate a standardized financial aid award letter
  • Strengthen entrance and exit loan counseling

The HEAA includes many issues NASFAA has been advocating for, including reinstatement of year-round Pell, a move to PPY income, the ability for private loans to be discharged in bankruptcy, early notification of financial aid awards, and mandatory school certification of private loans. NASFAA President Justin Draeger sent a letter of support to Chairman Harkin, thanking him for his commitment to starting the reauthorization process and for including some of the Association’s key advocacy issues.

The HEAA is unlikely to see any real movement on the Hill, but its ideas and reforms serve as an important marker for upcoming reauthorization discussions.  “College affordability, skyrocketing student debt, accountability, and transparency—these are all very high-stakes issues for students and families,” said Chairman Harkin in a fact sheet about the bill. “The Higher Education Affordability Act seeks bold changes to our system of higher education in order to make a college education more affordable and accessible.”  

NASFAA will be analyzing the lengthy bill and will provide a more detailed analysis in the coming week.  

 

Publication Date: 6/26/2014


Raymond G | 6/26/2014 2:7:47 PM

To clarify - There's a point where doing everything for the students without considering your staffs' quality of life causes other issues such as low morale, high turnover, increased errors, and higher processing times. Which then affect the students' view of college and the overall financial aid system.

Raymond G | 6/26/2014 12:8:35 PM

Year round Pell was such a manual process that it created an Administrative burden. Many voiced their opposition to it and it subsequently was abolished. Why are we headed that way again? I don't believe our interests are being truly represented here. There must be a balance between serving Financial Aid Administrators and Students just as businesses must balance employee morale and customer service.

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