Senator Alexander Proposes Scaled Back HEA

By NASFAA Policy & Federal Relations Staff

Thursday afternoon, Chairman of the Senate Health, Education, Labor, and Pensions Committee Sen. Lamar Alexander (R-TN) made good on one of his landmark legislative initiatives when he took to the Senate floor to propose a narrow reauthorization of the Higher Education Act (HEA) that focuses largely on simplifying the FAFSA.  

The Student Aid Improvement Act takes up several suggestions offered by NASFAA, including auto-qualifying applicants up-front for maximum Pell Grants if they meet specific criteria like qualifying for certain means-tested benefits or make too little money to need to file tax returns, although a small number of students qualifying for means-tested benefits could have an auto-zero EFC and still not qualify for a full Pell Grant under the bill. Incorporating another NASFAA recommendation, applicants would not be required to list assets on the FAFSA if their tax returns did not indicate any significant assets as reported on tax schedules. The bill would also pave the way for more cooperation between federal agencies to auto-qualify applicants.  

Alexander’s bill would restructure the need analysis formula by creating a “Student Aid Index” that would be used to qualify students for Pell eligibility largely based on their family size and adjusted gross income relative to the poverty line, with several income and asset protection allowances. 

The bill would also require significant standardization of financial aid offers, by mandating the use of standard language and a standard format, as well as multiple other items. The language in the bill mirrors the "Understanding the True Cost of College Act," which was introduced earlier this year by Sens. Chuck Grassley (R-IA), Tina Smith (D-MN), and Joni Ernst (R-IA). The bill would require certain standardized items to be included on the first page of the financial aid offer and in the same order, and sets strict standards for the way financial aid and enrollment information must be displayed on the first page of the aid offer. 

While NASFAA supports standardizing some elements of institutional aid offers, NASFAA President Justin Draeger has called the Understanding the True Cost of College Act too prescriptive and not adaptable or helpful enough to meet students’ needs as has been determined through third-party, independent consumer testing

Instead, NASFAA has supported a bipartisan bill in the House to bring some standardization to financial aid offer forms by mandating the use of standard terms and definitions, as well as requiring institutions to include a "quick reference box" allowing students to quickly compare aid offers. The bipartisan Financial Aid Communication and Transparency Act, or FACT Act, mandates few formatting requirements and directs the Department of Education (ED) to conduct consumer testing that establishes standardized definitions and groupings of aid type and determines any additional elements that should be included in financial aid offers.

The Student Aid Improvement Act also lifts the caps on income-based repayment from the current limit that is set at a 10-year standard repayment amount. 

NASFAA President Justin Draeger issued the following statement: 

“We welcome continued movement forward on Reauthorization of the Higher Education Act. NASFAA is supportive of the direction this bill takes in simplifying, auto-populating, and helping students qualify for financial aid. We look forward to reviewing the data to ensure that students do not lose any funding due to the changes to the need analysis formula. 

We have concerns about the prescriptive nature of financial aid offers mandated in this bill, particularly as independent consumer tests indicate that some of the requirements in this bill would not be helpful to students and families. NASFAA supports standardized elements on financial aid offers and has worked bipartisanly with lawmakers to craft a bill that would make aid offers more readable and usable to students and families. We urge lawmakers to adopt the Financial Aid Communication and Transparency Act recently introduced in the U.S. House of Representatives.”

The bill faces stiff opposition from Senate Democrats, led by by Ranking Member Sen. Patty Murray (D-WA) who expressed frustration on the Senate floor Thursday that this bill was brought forward after negotiating for months in good faith for a comprehensive HEA reauthorization.

 

Publication Date: 9/26/2019


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