The myriad legislative proposals and regulations introduced in the last year to govern the relationships between schools and student loan providers have left many dazed and confused. So it was welcome news last month when the Senate HELP Committee released its Committee Report for its reauthorization legislation (S. 1642) that gave schools, lenders, and guarantors a green light to collaborate on College Goal Sunday initiatives.
A Committee Report is a document issued by a congressional committee that reports a bill to the floor for debate. Committee Reports usually contain a summary of the legislation, background information, a description of committee actions, explanations of the provisions of a bill, a cost estimate from the Congressional Budget Office, a section-by-section analysis of the legislation, changes from current law, and, many times, contain minority views or dissenting analysis of various provisions or the need for the legislation.
Last July the Senate unanimously approved the Higher Education Amendments of 2007, a bill that would reauthorize the Higher Education Act and make several significant changes to the federal student aid programs. The proposed legislation takes a hard line on school-lender relationships. The bill has numerous provisions limiting or prohibiting fairly common past business practices in the lending community.
Other regulations issued by the Department prohibit schools and loan providers from collaborating on issues where there have been long-standing partnerships - like loan exit counseling - leaving many administrators wondering what, if any, contact they should be having with lenders and guarantors.
The Committee Report clarifies the intent of the proposed legislation stating that the committee "does not intend for these restrictions to prohibit lenders, guaranty agencies, and institutions of higher education from participating in or supporting outside events designed to assist students in applying to college or completing the Federal financial aid process, such as College Goal Sunday."
"This report is good news for all the College Goal Sunday programs that depend on collaborative partnerships to effectively deliver essential services to underserved populations," said NASFAA Director of College Access Programs Marcia Weston.. "This added clarity helps College Goal Sunday initiatives to continue the program’s important work."
Philanthropic giving to schools by loan providers also was clarified by the Senate HELP Committee. The Committee Report states, "The committee emphasizes that these new restrictions are not meant to prohibit an institution of higher education from receiving a philanthropic contribution from a lender, such as support for an endowed professorship, as long as such contribution is not made in exchange for an advantage sought by the lender to make educational loans to students enrolled at the institution."
Even though the bill must pass through several stages before becoming law, the Committee Report clearly articulates the HELP committee’s sanction of collaborative efforts in College Goal Sunday and other philanthropic initiatives.
The Senate reauthorization bill has been in a holding pattern while the House works on its own reauthorization legislation, which just passed out of the House Education Committee last month and is now waiting for a full House vote. Once that bill is passed out of the House, the Senate and House reauthorization bills will be conferenced together before making its way to the President’s desk.
The last HEA extension authorizes the Act through March 31, 2008. Whether reauthorization House floor action will occur before the December break is unknown but many expect final action on a Conference Report prior to the expiration of the latest HEA extension.
By Justin Draeger
NASFAA Assistant Director for Communications
NASFAA Director for Congressional Relations Larry Zaglaniczny, also contributed to this article.
Posted 12/05/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
