Analyzing the College Affordability Act: General Provisions and Miscellaneous Changes

By Megan Walter, NASFAA Policy & Federal Relations Staff

Updated Nov. 6, 2019: A markup of this bill took place over three days from Oct. 29-31, 2019 — after the article below was written. An amendment in the nature of a substitute replaced the original bill text, and multiple amendments were adopted during the markup process. The substitute amendment and additional amendments made several minor changes, and this article has been updated to reflect those updates.

Editor's Note: This article is the sixth and final in a series that delves into Title IV-related issues contained in the House Democrats' bill to reauthorize the Higher Education Act, the College Affordability Act. This article details the proposed changes in the College Affordability Act affecting general provisions and miscellaneous items. See all of NASFAA's coverage of the College Affordability Act.

America’s College Promise Federal-State Partnership

The College Affordability Act (CAA) authorizes the America’s College Promise Federal-State Partnership, which would provide federal grants to eligible states and Native American tribes to make community college free for eligible students. States and tribes would have to agree to waive community college resident tuition and fees for all eligible students in order to receive the grants. The federal share of these grants would be equal to the per-student amount needed to pay 75% of the average community college resident tuition and fees, or 95% in the case of tribes whose own community colleges serve more than 75% low-income students.

The bill also contains a provision within the partnership for historically black colleges and universities (HBCUs) and minority-serving institutions (MSIs) to cover tuition and fees for the first 60 credits students take at those institutions. HBCUs and MSIs that enroll a student body comprised of at least 35% low-income students could apply for grants under separate programs contained within the partnership to be used to waive or significantly reduce tuition and fees for a student’s first 60 credits at the institution. HBCU and MSI grants would not require a non-federal match.

90/10 Rule

A definition of federal education assistance funds is added to the CAA, stating that “any federal funds provided … through a grant, contract, subsidy, loan or guarantee, or through insurance or other means including federal funds disbursed or delivered to an institution on or behalf of a student or to a student to be used to attend the institution.” With this new definition, veteran benefits such as the Post-9/11 GI bill would now need to be included when proprietary institutions are calculating their revenue percentages from federal and non-federal sources.

The 90/10 rule would also be changed to an 85/15 ratio wherein the 85% calculation must include the federal education assistance funds listed in the new definition referenced above.  

Competency-Based Education

The CAA creates a competency-based education (CBE) demonstration project that would allow institutions, selected by the Department of Education (ED), to request a waiver of, or flexibility on, certain statutory and regulatory requirements in order for them to award Title IV aid under a CBE model. ED would be required to conduct outreach to institutions eligible to take part in the program, especially targeting HBCUs, MSIs, Alaska Native-serving institutions, Native Hawaiian-serving institutions, predominantly black institutions, Asian American and Native American Pacific Islander-serving institutions, as well as institutions that predominantly serve adult learners, those that serve students with disabilities, and those located in rural areas.

A CBE council would be created to conduct a study on ongoing innovation and development of CBE programs, as well as make recommendations to Congress that would update standard definitions and/or address items such as the  amount of learning in a competency unit, or the transfer of competency-based credits to other institutions or programs. The council would also be required to submit interim reports made available to the public that provide information on the ongoing demonstration projects. 

Homeless and Foster Youth Students

Regarding homeless students and foster care youth, the bill would mandate that each institution designate a staff liaison to support these two student classifications. The liaison would be charged with providing assistance to these students by connecting them with support services in areas such as financial aid, public benefits, health care, mental health, and child care. The bill would also require that these students receive priority for institutionally-owned housing and that the institution has a plan for housing these students during breaks. 

Teach-Out Plans

The definition of a teach-out plan has been elaborated on under the CAA, naming more specific requirements that would need to be included in a plan. Teach-out plans would now be additionally defined as having:

  • A process to maintain a complete list of students and their estimated program of study completion dates; and

  • A record retention plan that includes plans to provide each student with their transcript at no cost.

Gainful Employment

Gainful employment (GE) would be officially defined under the CAA, a first for Higher Education Act (HEA) legislation. GE would be defined as a “program of training to prepare students for gainful employment in a recognized occupation” that is in compliance with certain performance requirements. Programs would have to meet metrics to be established by ED, including a debt-to-earnings rate, with the earnings amount based on the mean or median of the actual student-level annual earnings. ED would also need to develop a disclosure template to be provided by institutions to prospective students. 

Child Care Access Means Parents in School Program

An amendment proposed during the markup process that was subsequently adopted would expand the allowable use of the Child Care Access Means Parents in School Program (CCAMPIS). The grant program would now be extended to include support for student parents who because of their educational schedules may require evening, weekend, or summer child care options.

Changes to Institutional Practices

The CAA would also prohibit some institutional practices, such as denying a student’s access to transcripts because of federal loan default. Institutions would also be banned from requiring students to agree to any time limits on when they could pursue legal claims against the institution. Similarly, institutions would be banned from requiring pre-dispute arbitration agreements as a condition of enrollment.

Institutions would also be required to designate a school official to coordinate compliance with Title VI of the Civil Rights Act and report any complaints to ED annually, which would be made publicly available. Institutions would also be required to provide an educational program on hazing, which would cover topics such as hazing awareness, hazing prevention, and the institution’s policies on hazing. 

Foreign Gifts

The foreign gift disclosure threshold under the CAA would be lowered from $250,000 to $100,000. It would also require ED to issue regulations to carry out the provisions of the section within two years after the adoption of the CAA, and to develop those regulations through a negotiated rulemaking process with consultation from stakeholders. For gifts or contracts from sources other than a foreign government, institutions would be required to disclose the legal name of the person or institution from which a gift is received, in addition to the aggregate amount of gifts attributed to a particular country. For gifts or contracts from or with a foreign government, institutions would need to disclose the name of the agency or office within a government from which the gift was received.

Aid Offers

Aid offers would receive some standardization through 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 language in the CAA directs 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 bill stipulates the addition of a mandatory "quick reference box" to be included on the first page of financial aid offers and be developed through consumer testing by the ED. The box would include up to eight data elements that would allow students to quickly compare aid offers, including cost of attendance, total grants and scholarships offered, and net price. 

Earnings Rate

Eligible programs at proprietary institutions would need to meet an earnings rate metric that would replace the current placement rate metric required under GE. Under the CAA, eligible programs would be required to have verified annual earnings rates among students who have completed the program that are not less than the annual average earnings rate of an individual with only a high school diploma in the United States, or the state or local area in which the institution is located. Programs that don’t meet these standards for two consecutive years would be subject to loss of Title IV eligibility. 

On-Time Repayment Rate

In addition to the changes to the cohort default rate (CDR) metric described in the fourth article of this series, the CAA would create a new repayment rate metric that would evaluate the percentage of borrowers at an institution who have repaid an amount equal to at least 90% of their monthly payment amount over three years. A payment would only be counted if it was made within 30 days of the due date, the amount due is zero, the full amount has been repaid or discharged, or the loan is in deferment for reasons other than economic hardship or unemployment. Under this rule, an institution could lose its eligibility to participate in Title IV programs if its on-time repayment rate is less than the threshold (to be determined by ED) and the amount expended on instruction by the institution is less than one-third of institutional revenue from tuition and fees. Individual degree levels at ineligible institutions can request an exception from ED if the degree level as a whole has an on-time repayment higher than the threshold. It is not clear, however, how programmatic eligibility could be retained in a scenario in which institutional eligibility has been lost. 

Written Arrangements

The bill would place new constraints on written arrangements between Title IV eligible and ineligible institutions. For eligible institutions that allow an ineligible institution to provide part of a student’s educational program, that program shall only be allowed to be considered eligible if the ineligible institution meets the following standards:

  • The institution has never had its Title IV eligibility revoked;

  • It has not voluntarily withdrawn from Title IV participation due to suspension or issues with accreditation status;

  • It has not had its certification or recertification for Title IV eligibility denied by ED;

  • It has no role in the admission of students into the program;

  • It provides less than 50% of the educational program (or from 25% to under 50% under certain circumstances);

  • The eligible institution and ineligible institution are not owned by the same corporations or individuals.

The eligible institution in this scenario would be responsible for providing data to ED on expenditures related to instruction, student services, marketing, recruitment, advertising, and lobbying with respect to the program covered by the written arrangement. 

Performance-Based Organization

Federal Student Aid (FSA) is a performance-based organization (PBO) under the supervision of a chief operating officer, who reports to the secretary of education. Under the CAA, the purpose of the PBO would be updated to include prioritization to students and borrowers in decision-making processes, making federal aid programs more easily understandable to students and parents, managing costs, increasing efficiency, increasing accountability of officials who administer operational aspects of federal programs, and increasing oversight of schools. To ensure these improvements take place, the secretary of education would be responsible for implementing accountability and oversight measures to make sure the newly-defined purpose is accomplished. 

The CAA would mandate the creation of a “borrower advocate” in the office of the PBO whose function would be to provide timely assistance to federal loan borrowers by responding to and reviewing their complaints about federal loans, working to resolve any complaints in the best interest of the borrowers, and reporting complaints to a state or accrediting agency if applicable. The borrower advocate would be responsible for publishing an annual report to ED that would summarize the complaints received from borrowers, including the number of complaints made.  

The borrower advocate would also be responsible for conducting impartial reviews in consultation with knowledgeable parties regarding a student's dependency status at the request of the student in the case of a student disputing the institution’s decision, and only in circumstances of homelessness.

Program Reviews

Certification procedures related to program reviews would be updated to include a requirement that institutions report changes in circumstances to ED in an addendum on their eligibility certification form if they have:

  • Been required to pay out on a judicial or administrative proceeding or determination, or a settlement; or

  • Been involved in an action for more than 120 consecutive days, or involved in an action for or financial relief from borrower defense claims by a state or the federal government; or

  • Been required by their accreditor to submit a teach-out plan; or

  • Programs that could become ineligible under gainful employment rules; or

  • A CDR over 20% for the preceding two fiscal years (unless they have filed an appeal/challenge).

For-profit institutions would be subject to even more circumstances that would force them to report the changes to ED, including; a warning from the Securities and Exchange Commission (SEC) that they may suspend trading; if more than 85% of their revenue is from Title IV funds; if they fail to file annual or quarterly reports with the SEC; if there is noncompliance with exchange they trade on, or if their stock is delisted. 

Program reviews would be given priority for institutions with a CDR above 18% or a CDR which places the institution in the highest 25% of all institutions. The CAA would also require ED to conduct undercover operations to look for unethical treatment of students, or instances of fraud or abuse as it relates to TItle IV programs or their funds.


Publication Date: 11/5/2019

James C | 11/5/2019 9:18:56 AM

Aid offers should be standardized but heavily tested through focus groups of students and families. The shopping sheet template created confusion.

There should be a requirement for program reviews that the Dep't of Ed issue their initial findings within 90 days of the audit not the 700+ days that is typical now.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

Higher Education Act Reauthorization News


NASFAA Shares Feedback on College Cost Reduction Act with House Education and Workforce Committee Leadership


View Desktop Version