The HEA 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:

• Does not make changes to the "Master Calendar" requirements as proposed by the Department of Education. NASFAA opposed this proposal and advocated Congress not to adopt it.

• Excludes Expected Family Contribution (EFC) from information that must be given to students for the self-certification form to be filed with lenders by students applying for private education loans. NASFAA has also been advocating this provision.

• The list of programs included in the definition of VA education benefits is updated, and the exclusion of all of those VA education benefits from estimated financial assistance is moved up to July 1, 2009. NASFAA has advocated for this provision so that the new GI Bill benefits will not be counted against a students estimated financial assistance.

• Extends the operation of experimental sites that have not been deemed "successful" to June 30, 2010 (from the previous discontinuation date of June 30, 2009), as NASFAA recommended. The bill directs ED to determine "success" based on:
  • the ability of the experimental site to reduce administrative burdens to the institution, as documented in ED's biennial report, without creating costs for the taxpayer; and
  • whether the experimental site has improved the delivery of services to, or otherwise benefited, students

• Clarifies that lenders and guaranty agencies may provide entrance counseling (on same basis as previously allowed exit counseling)

• Expands the Department's temporary authority to purchase loans to include rehabilitated loans and requires lenders to use proceeds of such sales to ensure continued participation in the FFEL Program

The bill also:

• Creates the "Iraq and Afghanistan Service Grants" - effective July 1, 2010 - for students whose parent or guardian died as a result of military service in Iraq or Afghanistan after 9/11/01, if the student was under 24 years old at the time or enrolled in an institution of higher education at the time

• Sets the EFC at zero for children of soldiers killed in Iraq or Afghanistan after 9/11/01, if the student was under 24 years old at the time or enrolled in an institution of higher education at the time, and is Pell-eligible - effective 7/1/09

• Clarifies that "EZ FAFSA" and simplified FAFSA on the web need not be implemented until 2010-11

A more complete list of provisions in the HEOA technical amendments bill is included below.

Technical Amendments to HEOA: Selected Provisions

Effective date: As if enacted as part of the HEOA, unless otherwise specified

Note: The technical amendments are exempted from negotiated rulemaking and Master Calendar provisions. The Master Calendar provision itself remains unchanged.

Title I

• Definition of institution of higher education: effective date for certain provisions moved up from 7/1/10 to date of enactment of HEOA (8/14/08), but looks like only for public or non-profit private and not proprietary or postsecondary vocational institutions:
  • Admission as regular students individuals who are home schools or are dually- or concurrently-enrolled
  • Degree offering that is acceptable for admission to graduate or professional program
• Information that institutions must furnish to students for the self-certification form to be filed with lender by students applying for private educational loans is clarified and modified to exclude the EFC

Title IV

Subpart A, Grants

• Provision setting EFC for Pell purposes to zero for children of soldiers killed in Iraq or Afghanistan after 9/11/01 is deleted, replaced by a clearer and broader provision in need analysis (see Subpart F below)

• "Iraq and Afghanistan Service Grants" - effective July 1, 2010 - created for students whose parent or guardian died as a result of military service in Iraq or Afghanistan after 9/11/01, if the student was under 24 years old at the time or enrolled in an institution of higher education at the time
  • Non-need-based (i.e., EFC not taken into consideration)
  • Not counted in estimated financial assistance (similar to treatment of VA educational benefits)
  • Replaces Pell Grant for an otherwise Pell-eligible student
  • Award amount equals maximum Pell Grant, except:
  • May not exceed cost of attendance
  • Reduced for part-time attendance

Subpart B, FFELP

• Clarifies that lenders and guaranty agencies may provide entrance counseling (on same basis as previously allowed exit counseling)

• Expands the subjects to whom guaranty agencies and lenders are prohibited from offering inducements from "any institution of higher education or the employees of an institution of higher education" to "any institution of higher education, any employee of an institution of higher education, or any individual or entity"

• Reinstates the prohibition against duplicative teacher loan forgiveness under both FFEL and DL

Subpart D, Direct Loans

• Expands ED's temporary authority to purchase loans to include rehabilitated loans and requires lenders to use proceeds of such sales to ensure continued participation in the FFEL Program

• Reinstates the prohibition against duplicative teacher loan forgiveness under both FFEL and DL

Subpart F, Need Analysis

• Effective 7/1/09, the EFC for all Title IV aid is set to zero for children of soldiers killed in Iraq or Afghanistan after 9/11/01, if the student was under 24 years old at the time or enrolled in an institution of higher education at the time, and is Pell-eligible

  Note: This amendment clarifies an outstanding issue related to the previous incarnation of this provision under the Pell Grant section of law. It clarifies that students must have a calculated EFC in the Pell-eligible range to begin with, to qualify for the reduction to zero . It also eliminates any confusion that would have resulted from one EFC for Pell and another for the other Title IV programs.

  • Departments of Defense and Veterans Affairs must provide ED with information to determine which students qualify

• The list of programs included in the definition of VA education benefits is updated, and the exclusion of all of those VA education benefits from estimated financial assistance is moved up to July 1, 2009

Subpart G, General Provisions

• Clarifies that "EZ FAFSA" and simplified FAFSA on the web need not be implemented until 2010-11

• Extends the operation of experimental sites that have not been deemed "successful" to June 30, 2010 (from the previous discontinuation date of June 30, 2009), and directs ED to determine "success" based on:
  • the ability of the experimental site to reduce administrative burdens to the institution, as documented in ED's biennial report, without creating costs for the taxpayer; and
  • whether the experimental site has improved the delivery of services to, or otherwise benefited, students

Media Coverage

Congress Approves Technical Amendments to Higher Education Act The Chronicle of Higher Education

Posted 06/25/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.