NASFAA Statement on House Higher Education Act Reauthorization Bill

Legislation Offers Mixed Bag of Gains, Losses for Students

December 1, 2017 - Republican members of the House of Representatives Committee on Education and Workforce today released a 542-page bill that seeks to improve postsecondary education during the upcoming reauthorization of the Higher Education Act (HEA) of 1965, as amended.

As the primary law that authorizes federal student aid programs for higher education, the HEA is to be reviewed and "reauthorized" by Congress every five years. However, the last HEA reauthorization took place back in 2008, following five years of temporary extensions. After expiring at the end of the 2013 fiscal year and running on yet another extension, House Republicans today released a comprehensive bill for reauthorization. This bill marks an important first step toward a full reauthorization, but many more remain that will likely change several aspects of this bill before the finish line.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), made the following statement regarding the bill:

"Like any bill of this magnitude released at this early stage of the reauthorization process, we see proposed changes that deserve the support of higher education advocates, others that raise questions and concerns that we hope to work with Congress on as they proceed, and still others that should be abandoned completely by lawmakers.

NASFAA applauds the committee on its proposals to incentivize on-time completion by providing an increase to the Pell Grant, which closely mirrors our own proposal. We support capping the total interest that can be accrued on a loan, eliminating loan origination fees, giving aid administrators the authority to limit borrower indebtedness in certain situations, consolidating and simplifying the myriad complex repayment plans, and proposing an increase in Federal Work-Study spending all while relaxing some of the programmatic restrictions that sometimes prevent schools and students from fully benefiting from that program.  

Other changes that seek to increase counseling requirements and provide greater transparency in college costs are good first steps and will require some additional thinking to ensure that we do not inadvertently inundate students with so much information that it becomes overwhelming.

Not surprisingly, the bill makes good on the committee’s long-standing interest in streamlining the aid programs into a one grant, one loan, one work-study model, a concept that has been debated in our own ranks for many years. Students who currently receive Federal Supplemental Educational Opportunity Grants (FSEOG) stand to lose under this model. One of our top priorities is to ensure that any funds produced through program consolidation are held and reinvested into students.  

We are intrigued by the ideas in the bill to simplify the Return of Title IV process, which is currently a complicated and archaic mechanism whereby schools try to calculate how much money must be returned to the government when a student withdraws. But we also have concerns and questions regarding the portion of that proposal that would require schools to take on even more financial risk when admitting at-risk populations.

Graduate students also stand to lose in this bill. We are concerned about the reduction in available loan funds for graduate students and seek to better understand to what extent the proposed loan limits would meet the needs of graduate students. Perplexingly, the bill proposes an increase for work-study, but then cuts graduate students out of the program. This provision needs to be revisited.

NASFAA opposes the elimination of all loan forgiveness provisions proposed in the bill, which will negatively impact many borrowers, but especially students attending graduate and professional schools. We acknowledge concerns about the long-term viability and administration of the Public Service Loan Forgiveness program, and have put forward a reasonable and responsible pathway forward that would retain these vital forgiveness programs.

These are just some of the changes proposed in this bill and we look forward to digging into more of the bill in the weeks and months ahead and working with lawmakers as we move towards a full reauthorization of the Higher Education Act."

To request an interview with a NASFAA spokesperson on House’s bill or NASFAA's policy priorities for reauthorization of the Higher Education Act, please email [email protected] or call (202) 785-6959.

Publication Date: 12/1/2017

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