NASFAA Summary of the Higher Education Opportunity Act
NASFAA provides the following summary as a general overview of the Higher Education Opportunity Act. The summary focuses on issues of interest to financial aid administrators and federal student aid issues. Some information and titles that have little to no impact on financial aid and financial aid offices have been left out.
The reauthorization legislation is enormous, totaling more than 1,100 pages. NASFAA staff compiled this general summary using the explanatory statement of the conference committee as well as the legislative text of the Conference Report. It is important to note that this summary attempts to summarize lawmakers' intent with the language. The Department will have the final say in interpreting lawmakers' intent when it develops regulatory language through the Negotiated Rulemaking process.
In the coming weeks, Today's News will run "NASFAA HEA Analysis" - a series of in-depth and specific issue articles examining individual provisions affecting your operations and students. This summary will include links to those in-depth articles as they are produced.
This legislation passed by wide margins in both the House and Senate and was signed into law by President Bush on August 14, 2008.
TABLE OF CONTENTS
TITLE I - GENERAL PROVISIONS
Section 101. General Definition of Institution of Higher Education
- Amends the definition of an institution of higher education to explicitly include home schooled students
- Allows proprietary institutions and postsecondary vocational institutions to admit students who are dually or concurrently enrolled in the institution and a secondary school as regular students.
Section 102. Definition of Institution of Higher Education for Purposes of Title IV Programs
- Allows proprietary institutions to offer bachelor's degrees in liberal arts.
- Adds nursing schools to the types of institutions of higher education located outside the United States that may be for-profit (proprietary) institutions of higher education and authorized to certify unsubsidized Stafford Loans and PLUS Loans to eligible students.
- Clarifies that graduate medical schools located outside of the United States which, under current law, are eligible to participate in Title IV, Part B because they have a clinical training program that was approved by a state as of January 1, 1992, must continue to operate a state approved clinical training program in not less than one state that has approved the program.
- Adds a specific set of criteria that nursing schools located outside of the United States are required to meet in order to qualify to certify unsubsidized Stafford Loans and PLUS Loans for their students.
- Requires the advisory panel of medical experts to submit a report to the Secretary and the authorizing committees within one year after date of enactment of this Act that will provide recommendations for alternate eligibility criteria for participation in the loan programs by foreign medical schools that do not meet the current statutory criteria. 180 days after the submission of the report, the Secretary may issue proposed regulations that would establish alternate criteria for the eligibility of graduate medical schools located outside of the United States. The Secretary may issue final regulations no earlier than one year after the issuance of the proposed regulations.
- Increases the pass rate percentage required for foreign medical schools to be eligible to certify student loan eligibility from sixty percent to seventy-five percent effective July 1, 2010.
Section 103. Additional Definitions
- Adds or changes the following definitions:
- "Critical foreign language" that references an August 2, 1985, Federal Register notice, and adds "Except as otherwise provided" at the beginning of the definition.
- "Authorizing committee," which means the Committee on Health, Education, Labor, and Pensions of the Section and the Committee on Education and Labor of the House of Representatives.
- "Distance Education," which means education that uses the Internet, one-way and two-way transmissions through open broadcast, closed circuit, cable, microwave, broadband lines, fiber optics, satellite, or wireless communications, audio conferencing; or ?video cassettes, DVDs, and CD-ROMs, to deliver instruction to students who are separated from the instructor and to support regular and substantive interaction between students and instructor.
- "Diploma mill," which mean an entity that offers, for a fee, degrees, diplomas, or certificates, without requiring any coursework to obtain such degree, diploma, or certificate; and lacks accreditation by an accrediting agency or association that is recognized as an accrediting agency or association of institutions of higher education
- "Early childhood education program," which mean a Head Start program, a state licensed child care program, or a program that serves children from birth through age six that addresses the children's cognitive (including language, early literacy, and early mathematics), social, emotional, and physical development.
- "Poverty line," which mean the poverty line as defined in Section 673(2) of the Community Services Block Grant Act applicable to family size.
- "Universal Design," which refers to the meaning given in Section 3 of the Assistive Technology Act of 1998.
- "Universal Design for Learning," which refers to a scientifically valid framework for guiding educational practice that provides flexibility in the ways information is presented and reduces barriers in instruction, provides appropriate accommodations, supports, and challenges, and maintains high achievement expectations for all students, including students with disabilities and students who are limited English proficient.
Section 104. Protection of Student Speech and Association Rights
- Expands on the current sense of Congress on the protection of student speech and association rights by adding a sense of Congress that schools should facilitate free and open exchanges of ideas, students should not be intimidated, harassed discouraged from speaking out or discriminated against, and that students should be treated equally and fairly.
Section105. Protection of Student Speech and Association Rights
- Changes the Title of Section 113 and deletes Subsection (b), which expired September 30, 2004. That provision addressed the eligibility of institutions of higher education in the Freely Associated States for TRIO programs.
Section 106. Treatment of Territories and Territorial Student Assistance
- Replaces the existing National Advisory Committee on Institutional Quality and Integrity (NACIQI) and establishes a new Committee with new rules on membership.
Section 107. Drug and Alcohol Abuse Prevention
- Requires an institution of higher education, in its biennial review, to determine the number of drug and alcohol-related violations and fatalities that have occurred on the institution's campus or as part of the institution's activities and that are reported to campus officials.
- Extends the authorization of appropriations for such sums as necessary for the Alcohol and Drug Abuse prevention grants to fiscal year 2009 and the five succeeding fiscal years.
- Eliminates the National Recognition Awards.
Section108. Prior Rights and Obligations
- This is a technical change extending authorization period to fiscal year 2009 and each succeeding fiscal year.
Section 109. Diploma Mills
- Moves the definition of a diploma mill and requires the Secretary to maintain information and resources on the Department's Web site to assist students and families in understanding what a diploma mill is and how to avoid a diploma mill.
Section 110. Improved Information Concerning the Federal Student Financial Aid Web site
- Requires the Secretary to ensure that the homepage of the U.S. Department of Education's web site includes a link to student financial aid information.
- Requires the Secretary to implement the improvements to the college financial planning and student financial aid web site developed by the contractor
- Requires the Secretary to publish information on the federal student financial aid web site about student financial assistance available from other federal departments and agencies.
Section 111. Transparency in College Tuition for Consumers
- Requires the Secretary to publish six lists, by institutional category: the five percent of institutions of higher education that have the highest tuition and fees for the most recent year; the five percent of institutions of higher education that have the highest net price for the most recent year; the five percent of institutions of higher education that have the largest percentage increase in tuition and fees over the most recent three years; the five percent of institutions of higher education that have the largest percentage increase in net price over the most recent three years; the ten percent of institutions of higher education that have the lowest tuition and fees for the most recent year; and the ten percent of institutions of higher education that have the lowest net price for the most recent year.
- Requires schools that appear on either or both lists of institutions of higher education with the greatest percentage increases in net price or in tuition and fees to submit to the Secretary a description of the major areas in the institution's budget with the greatest cost increases, an explanation of cost increases, and a description of the steps the institution of higher education will take to reduce costs in those major areas.
- Requires the Secretary to report annually on the College Navigator Web site, in charts for each State, comparisons of the percentage change in spending by such State per full-time equivalent student at all public institutions of higher education in such State, for each of the five most recent preceding academic years; the percentage change in tuition and fees for such students for all public institutions of higher education in such State for each of the five most recent preceding academic years; and the percentage change in the total amount of need based aid and merit-based aid provided by such State to full time students enrolled in the public institutions of higher education in the State for each of the five most recent preceding academic years.
- Within a year, the law requires the Secretary to develop a net price calculator to help current and prospective students estimate the individual net price of a school. The cost of attendance and the amount of need-based and merit-based aid available will be calculated for the individual student as much as practicable.
- Within two year of the calculator, schools that received Title IV funds will be required to publicly share a net price calculator to help current and prospective students estimate their individual net price at that school as well as other financial aid information.
- Requires the Secretary to provide an litany of consumer information on the College Navigator Web site for each school that participates in Title IV programs, such as (this list is not all inclusive):
- A statement of the institution's mission.
- The total number of undergraduate students who applied to, were admitted by, and enrolled in the institution.
- The percentages of first-time, full-time, degree- or certificate-seeking students enrolled at the institution, disaggregated by race and ethnic background.
- The number of certificates, associate degrees, baccalaureate degrees, master's degrees, professional degrees, and doctoral degrees awarded by the institution.
- The undergraduate major areas of study at the institution with the highest number of degrees awarded.
- The student-faculty ratio, the number of full-time and part-time faculty, and the number of graduate assistants with primarily instructional responsibilities, at the institution.
- The average annual grant amount (including Federal, State, and institutional aid) awarded to a first-time, full-time undergraduate student enrolled at the institution who receives financial aid.
- The average annual amount of Federal student loans provided through the institution to undergraduate students enrolled at the institution.
- The total annual grant aid awarded to undergraduate students enrolled at the institution, from the Federal Government, a State, the institution, and other sources known by the institution.
- The percentage of first-time, full-time undergraduate students enrolled at the institution receiving Federal, State, and institutional grants, student loans, and any other type of student financial assistance known by the institution, provided publicly or through the institution, such as Federal work-study funds.
- The number of students enrolled at the institution receiving Federal Pell Grants.
- The institution's cohort default rate
- A link to the appropriate section of the Bureau of Labor Statistics Web site that provides information on regional data on starting salaries in all major occupations.
- With in a year of the law's enactment, the Secretary must develop a multi-year tuition calculator to help current and prospective students estimate the amount of tuition they may pay to attend an institution of higher education in future years.
Section 112. Textbook Information
- Includes provisions that provide more information on the cost of textbooks designed to ensure that students have better and timelier access to course materials. These provisions are intended to decrease the cost of textbooks for students in higher education by ensuring that faculty, students, and bookstores all have sufficient, relevant, and timely information to make informed purchasing decisions.
- Requires a publisher to provide to faculty or others selecting textbooks, the wholesale price, and if available, the retail price at which books are made available to the public, respectively, and specify the copyright dates of the three previous editions.
- Specifies that an institution shall, to the maximum extent practicable, make the required textbook information, including ISBN information, available on its Internet course schedule in a manner of the institution's choosing.
- Requires institutions to publish a link to this information in its written course schedule. The law also encourages institutions to disseminate information to students about institutional programs that would help students save money on textbooks, such as rental programs or buy-back programs.
Section 113. Database of Student Information Prohibited
- Prohibits the development, implementation, or maintenance of a federal database of personally identifiable information. This prohibition should not be construed to prohibit the Secretary from performing surveys that are necessary to monitor the operation of the student aid programs, in particular the National Postsecondary Student Aid Survey which is a valuable source of information on how students and families finance their postsecondary education.
Section 114. In-State Tuition Rates for Armed Forces Members, Spouses, and Dependent Children
- Prohibits public institutions that receive HEA funds from charging the dependents of members of the Armed Forces on active duty for more than thirty days, whose domicile or permanent duty station is in the same state, more than in-state tuition rates.
Section 115. State Higher Education Information System Pilot Program
- Establishes a State Higher Education Information System Pilot program to assist up to five states in developing state-level postsecondary data systems.
Section 116. State Commitment to Affordable College Education
- Establishes "maintenance of effort" (MOE) requirements that, after July 1, 2008, states must meet to receive funding under the House-proposed "Grants for Access and Persistence" (GAP) program, which replaces the existing Special Leveraging Educational Assistance Partnership program.
- Requires states to meet the MOE in order to receive an initial grant under the new College Access Challenge Grant program and allows for a MOE waiver in certain circumstances such as a natural disaster or a precipitous and unforeseen decline in their financial resources.
Section 117. Performance-Based Organization for the Delivery of Federal Student Financial Assistance
- Changes the description of the functions of the Performance-Based Organization (PBO) at the Department of Education from "operational" to "administrative and oversight" and makes the PBO responsible for the administration of federal student financial assistance programs.
Section118. Procurement Flexibility
- Provides PBO with additional contracting authority
Section 119. Certification Regarding the Use of Certain Federal Funds
- Specifies that federal funds received by an institution of higher education or other postsecondary educational institution may not be used to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, or an employee of a Member of Congress in awarding a federal contract, making a federal grant or loan, entering into any federal cooperative agreement, or in extending, continuing, renewing, amending, or modifying any federal contract, grant, loan, or cooperative agreement.
Section 120. Institution and Lender Reporting and Disclosure Requirements
- Adds a new Part E to Title I (with Sections 151 -154), instituting lender and institutional requirements relating to education loans.
Section 151. Definitions
- Defines "covered institution" as any institution of higher education as such term is defined in Section 102 that receives any federal funding or assistance. Defines "agent" as an officer or employee of a covered institution or an institution--affiliated organization. An affiliated organization ;may include an alumni organization, athletic organization, foundation, or social, academic, or professional organization, of a covered institution. (This definition of affiliate excludes any lender with respect to any education loans secured, made or extended by such lender.)
- Defines "education loan" as including any loan made, insured, or guaranteed under Title IV Parts B and D; or is a private education loan which is defined as "is issued expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender." A private education loan does not include an extension of credit under an open end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling.
- Defines "preferred lender arrangement" as an arrangement or agreement between a lender and a covered institution or institution-affiliated organization, under which a lender provides or issues educational loans to students attending a covered institution, or their families; and which is related to the covered institution recommending, promoting, or endorsing, educational loan products of the lender; and which does not include arrangements with respect to the Direct Loan program loans, or Federal Family Education Loan (FFEL) parent PLUS Loans for new parent borrowers after July 1, 2009 under terms of a new pilot auction program.
- Defines the terms "eligible lender" and "lender."
- Defines "officer" as including a director or trustee of a covered institution if the individual is treated as an employee of the covered institution
Section 152. Responsibilities of Covered Institutions, Institution-Affiliated Organizations and Lenders
- Institutes requirements, including extensive disclosure requirements, for lenders and institutions of higher education participating in "educational loan arrangements."
- Prohibits co-branding of education loans
- Requires a covered institution that enters into an educational lender arrangement to disclose the name of the lender in documentation related to the loan.
- Requires FFEL lenders that participate in one or more "preferred lender arrangements" to annually certify compliance with requirements of the Act and to report on and attest to such compliance in its annual compliance audit.
- Requires lenders participating in educational loan arrangements, prior to providing a Title IV education loan to a student, to disclose to the student certain information about the terms and conditions of such loans
- Requires lenders participating in education loan arrangements to annually report to the Secretary any reasonable expenses paid or given to an individual employed in the financial aid office of a covered institution, or who has responsibilities with respect to educational loans or other types of financial aid.
- Requires the Secretary to display on the Department of Education Web site, and to provide to colleges and universities, specified information to be used for counseling and consumer information for prospective borrowers.
Section 153. Loan Information to be Disclosed and Model Disclosure Form for Covered Institutions, Institution-Affiliated Organizations, and Lenders Participating in Preferred Lender Arrangements
- Requires the Secretary, not later than eighteen months after enactment, to coordinate with the Board of Governors of the Federal Reserve, and consult with students, their families, representatives of covered institutions (including financial aid administrators, admission officers, and business officers), representatives of institution-affiliated organizations, high school guidance counselors, lenders, loan servicers, and guaranty agencies, and to determine the minimum information that lenders, covered institutions, and institution-affiliated organizations participating in preferred lender arrangements must make available regarding education loans that are offered to students and their families.
- Requires the Secretary to consider the merits of requiring schools and institution-affiliated organizations that have preferred lender arrangements to provide prospective borrowers and families the following information for each type of loan made, insured or guaranteed under Title IV: the interest rate and terms and conditions of the loan for the next award year, including loan forgiveness and deferment; information on any charges such as origination and federal default fees that are payable on the loans, and whether those charges will be paid by the lender or the borrower; the yearly and cumulative maximum amounts that may be borrowed; the average amount borrowed from the lender by undergraduate and graduate students who were enrolled and who graduated the preceding year; the amount the borrower may pay in interest, based on a standard repayment plan and the average amount borrowed by students who graduated from the institution of higher education the preceding year with subsidized and unsubsidized Stafford loans and PLUS loans; the consequences for the borrower of defaulting on a loan, including limitations on the discharge of an education loan in bankruptcy; the contact information for the lender; and other information suggested by those with whom the Secretary has consulted. In addition, an amendment requires the Secretary, in determining the minimum information that lenders, covered institutions, and institution-affiliated organizations participating in preferred lender arrangements shall make available regarding education loans that are offered to students and the families of students, to incorporate identical or similar disclosures developed by the Board of Governors of the Federal Reserve pursuant to Section 128(e)(1) of the Truth in Lending Act.
- Requires the Secretary, after consulting with the public and in coordination with the Board of Governors of the Federal Reserve to specify the information covered institutions and institution-affiliated organizations with preferred lender arrangements must provide to prospective borrowers and the families of such borrowers regarding loans made, insured, or guaranteed under Title IV and require covered institutions and institution-affiliated organizations to provide such information on a model disclosure form developed by the Secretary or on a form developed by the institution of higher education. The Secretary shall update the model disclosure form periodically.
- Requires lenders that participate in preferred lender arrangements to report information for Part B loans annually to a covered institution or an institution-affiliated organization and to the Secretary, by a date to be determined by the Secretary.
- Requires covered institutions and institution-affiliated organizations to make the information that the Secretary requires for the model disclosure format and the information that a private educational lender provides to a covered institution and institution-affiliated organizations pursuant to Sections 128(e)(12) and 128(e)(1) of the Truth in Lending Act, available in time for students and families to consider before selecting a lender or applying for an education loan.
- Requires schools and institution-affiliated organizations to prepare and submit to the Secretary an annual report that includes, for each lender that has a preferred lender arrangement with the covered institution and institution-affiliated organization the following: The information the Secretary requires for the model disclosure form and the information private educational lenders participating in a preferred lender arrangements provide to covered institutions and institution-affiliated organizations, for each type of education loan provided, pursuant to the preferred lender arrangement. The reports must also include an explanation of why the covered institution or institution-affiliated organization entered into a preferred lender arrangement, including why the terms, conditions, and provisions of each type of loan for students are beneficial for students or the families of students. The covered institution or institution-affiliated organizations shall ensure that the report is made available to the public and provided to students attending or planning to attend the covered institution.
- Each school that has a preferred lender arrangement must disclose on its Web site, in addition to this information and the disclosures required under the program participation agreement, the maximum amount of federal financial assistance available to students and a statement that the institution of higher education is required to process the documents required to obtain a federal education loan from any eligible lender the student selects.
- Requires covered institutions of higher education that make information on private educational loans available to students or their parents to also make certain information about private loans and federal student aid under Title IV available.
- Schools must inform students, or their parents, of their eligibility for federal student aid, including loans under Title IV; describe the terms and conditions of private educational loans that may be less favorable than the terms and conditions of Title IV student loans for which they are eligible; and clearly distinguish between private educational loans and loans made, insured, or guaranteed under Title IV.
Section 154. Loan Information to be Disclosed and Model Disclosure Form for Institutions Participating in the William D. Ford Federal Direct Loan Program
- Establishes a new Section that requires the Secretary to provide each institution of higher education participating in the William D. Ford Direct Loan program with a completed model disclosure form including the same information for Federal Direct Stafford loans, Federal Direct Unsubsidized Stafford loans and Federal Direct PLUS loans made to, or on behalf of, students attending the institution as is required on such forms for loans described in Section 151(3)(A).
- Requires institutions participating in the Direct Loan program to make the information the Secretary provides available to students attending or planning to attend the institution and their families.
TITLE III - INSTITUTIONAL AID
Section 303. American Indian Tribally Controlled Colleges and Universities
- Redefines a Tribal College or University (TCU) as an institution that qualifies for funding under the Tribally Controlled College and University Assistance Act (TCCUAA) or the Navajo Community College Assistance Act of 1978 or, that is cited in Section 532 of the Equity in Educational Land-Grant Status Act (EELGSA).
- Allows funds to be used for education and counseling services to improve the financial and economic literacy of students or their families, and developing distance education technologies.
- Establishes a new allocation formula whereby the Secretary may reserve thirty percent of the appropriations for one-year construction, maintenance and renovation grants of not less than $1,000,000.
- Specifies that of any remaining funds, sixty percent shall be allocated to eligible institutions based on Indian student count and forty percent equally distributed among eligible institutions. The minimum grant amount is $500,000.
Section 304. Alaska Native and Native Hawaiian-Serving Institutions
- Expands the authorized activities to include education or counseling services designed to improve the financial and economic literacy of students or their parents.
Section 305. Predominately Black Institutions.
- Definition of "enrollment of needy students" means students who attended a public or nonprofit secondary school in a district that was eligible for assistance under Part A of Title I in ESEA and where enrollment of students counted under Section 1113(a)(5) of ESEA exceeds thirty percent.
- Specifies that the Section 393 (Application Review Process) of the HEA does not apply to Predominantly Black Institution applicants.
- Authorizes $75,000,000 for fiscal year 2009 and such sums as may be necessary for each of the five succeeding years.
Section 306. Native American-Serving, Nontribal Institutions
- Establishes a new program for Native American-serving, nontribal institutions of higher education to improve and expand the institutions' capacity to serve Native Americans with a minimum grant amount of $200,000.
Section 307. Assistance to Asian American and Native American Pacific Islander-Serving Institutions
- Establishes a new grant program for Asian American and Native American Pacific Islander-serving institutions.
Section 313. Endowment Challenge Grants
- Increases the maximum grant amount to $1,000,000 and the minimum grant amount to $100,000.
Section 315. Programs in STEM Fields
- Creates a new subpart 2, "Programs in STEM Fields", and a new YES Partnership Grant, that provides support to eligible partnerships for minority youth engagement in science, technology, engineering and mathematics, through outreach and experiential learning. The partnership must include at least one institution of higher education eligible for assistance under Title III or V, at least one high-need local education agency; and at least two community organizations. The law specifies a minimum grant amount of $500,000.
Section 316. Investing in Historically Black Colleges and Universities and other Minority Serving Institutions
- Includes a provision to move Part J of Title IV of the College Cost Reduction and Access Act to Title III.
Section 319. Authorization of Appropriations
- Authorizes appropriations for fiscal year 2009 of: $135,000,000 for Part A other than American Indian Tribally Controlled Colleges and Universities, $75,000,000 for Predominantly Black Institutions, $30,0000,000 for American Indian Tribally Controlled Colleges and Universities, $15,000,000 for Alaska Native and Native Hawaiian-Serving Institutions, $30,000,000 for Assistance to Asian American and Native American Pacific Islander-Serving Institutions, $25,000,000 for Native American-Serving, Nontribal Institutions, $375,000,000 for Strengthening Historically Black Colleges and Universities, $125,000,000 for Historically Black Graduate Institutions, $10,000,000 for Endowment Challenge Grants for Institutions Eligible for Assistance Under Part A or Part B, $185,000 for Historically Black College and University Capital Financing, such sums as necessary for Technical Assistance, $12,000,000 for the Minority Science and Engineering Improvement Program, and such sums as may be necessary for YES Partnership Grants, and such sums as may be necessary for each of the five succeeding fiscal years for each program.
TITLE IV - STUDENT ASSISTANCE
PART A - GRANTS TO STUDENTS
Section 401. Federal Pell Grants
Effective July 1, 2009, the law increases the authorized Pell Grant maximums for eligible students to:
- $6,000 for academic year 2009-10
- $6,400 for academic year 2010-11
- $6,800 for academic year 2011-12
- $7,200 for academic year 2012-13
- $7,600 for academic year 2013-14
- $8,000 for academic year 2014-15
The law also:
- Sets the minimum Pell Grant amount to ten percent of the maximum Pell Grant level appropriated for that year.
- Allows students to receive two Pell Grants during a single award year to allow them to accelerate their progress towards their degree. They must be enrolled at least half-time and be enrolled in a program of instruction at a school that awards an associate or baccalaureate degree or a certificate for such an instructional program
- Limits the time students can receive Pell Grants to up to 18 semesters or its equivalent for students who first receive a Pell Grant on or after July 1, 2008. Only the amount (or percent) of time that a student is enrolled will count against that time limit.
- Eliminates eligibility for persons who are subject to an involuntary civil commitment upon completion of a period of incarceration for a forcible or nonforcible sexual offense.
- Grants an automatic zero EFC for Pell eligible students whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001. A student must have been twenty-four years of age or less or enrolled at least part-time at an institution at the time of the parent's death. Legislators do not believe that this should be an additional question on the FAFSA, rather the Secretaries of Defense and Veterans Affairs should provide the Secretary of Education with the information necessary to determine which students meet the requirement.
Section 402. Academic Competitiveness Grants
The legislation amended some of the changes enacted through the "Ensuring Continued Access to Student Loans Act of 2008" (PL 100-227). These changes are enacted as if they had been part of ECASLA.
- Revises the effective date of the ECASLA amendments from January 1, 2009 to July, 1, 2009
- Reinstates the Secretary's authority to recognize rigorous high school curricula as originally written through June 30, 2009; effective July 1, 2009, shifts authority to recognize rigorous curricula from the Secretary to the appropriate state official and requires only reporting of those curricula to the Secretary, but continues the Secretary's authority to establish additional definitions of rigorous high school curricula by regulations as they were in effect on May 6, 2008
- Clarifies that unused funds remain available through the end of the succeeding fiscal year.
Section 403. Federal Trio Programs
- Extends the duration of TRIO grants from four to five years
- Increases minimum grant amounts for each TRIO program to $200,000 (evaluation grants are raised to $170,000)
- Allows the Secretary to award grants to different campuses of an institution
- Extends eligibility for the Post-baccalaureate Achievement program to Native Hawaiians and Pacific Islanders
- Community-based organizations are eligible for the TRIO programs
- Clarifies that secondary schools can serve as eligible grantees for TRIO programs that take place in secondary schools
- Mandates the Secretary to consider number, percentages, and needs of eligible participants in the area, institution of higher education, or secondary school to be served when assessing the level of need of an institution.
- Requires that all TRIO grantees identify services specifically for foster care youth
- Clarifies that homeless youth are eligible to participate in TRIO programs
- Sets specific requirements that outcome criteria must measure the quality and effectiveness of an entity's program and be compared to the target established in the entity's application. The Department of Education should work with grantees to design and implement outcome measures that will not result in reduction of services to current students.
- Adds completion of a rigorous secondary school program and postsecondary education completion as outcome criteria for students in Talent Search
- Adds a new appeals process in cases where the applicant has evidence of a specific technical, administrative, or scoring error made by the Department to formally appeal their grant scores.
- Increases authorization levels to $900,000,000 for FY 09
- Amends veterans eligibility for Upward Bound to include anyone who served on active duty more than 180 days after January 31, 1955, served on active duty after January 31, 1955 and was discharged because of a service connected disability, was a member of the reserves and called to active duty for more than 180 days, members of the reserves called to active duty for more than 30 days, or was a member of the reserves who served on active duty in support of a contingency operation on or after September 11, 2001.
- Adds academic tutoring as a permissible service and requires connections to education or counseling services designed to improve financial literacy, instead of requiring the provision of those services.
- Authorizes Talent Search, Upward Bound, Educational Opportunity Centers, Staff Development activities and Student Support Services to give support to students who are limited English proficient, groups or persons from disadvantaged backgrounds that have particular lower education access or outcomes, disconnected students, traditionally underrepresented in postsecondary education, students with disabilities, and other disconnected students.
- Breaks the current list of "permissible services" in the Upward Bound, Student Support Services, and Post-baccalaureate Achievement programs into "required services" and "permissible services."
- Prohibits the Secretary from denying a student participation in a project because the student will enter the project after the ninth grade. The law contains no similar provision.
- Adds housing services for students who are (or were) homeless and students who are in (or are aging out of) foster care.
- Adds financial and economic literacy to the authorized activities for Educational Opportunity Centers and changes the current allowable service of personal counseling to "individualized personal, career, and academic counseling."
- Requires a new report from the Secretary to the authorizing committees that includes practices regarding evaluations and the dissemination of evaluation findings to be implemented - along with an evaluation of the Upward Bound program by June 30, 2010.
Section 404. Gaining Early Awareness and Readiness for Undergraduate Programs
- Removes the requirement that eligible entities "provide or maintain a guarantee to eligible low-income students who obtain a secondary school diploma (or its recognized equivalent), of the financial assistance necessary to permit the students to attend an institution of higher education" and clarifies that eligible entities shall provide support and maintain a commitment to assisting participants in obtaining a secondary school degree and succeeding in postsecondary education.
- Includes students with disabilities to the description of those to receive services.
- Establishes the duration of grants to be six years or, in the case of an entity that plans to provide services to students through their first year of postsecondary education, for seven years.
- Gives priority to entities that have carried out successful programs prior to enactment of this legislation and requires the Secretary to ensure that students served under the program will continue to receive assistance through completion of secondary school.
- Amends the definition of a partnership by removing the reference to elementary and secondary schools and replacing it with one or more local educational agencies.
- Amends the funding rules in current law to:
- Remove references to continuation grants for the program which preceded GEAR UP
- Remove the requirement that thirty-three percent of funds go to the State grant program and thirty-three percent go to the Partnerships program
- Require the Secretary to consider the geographic and rural/urban distribution of grants
- Require the Secretary to make available no less than thirty-three percent of grant funds to States and no less than thirty-three percent of grant funds to partnerships and to distribute the remaining grant funds between states and partnerships. In awarding grants the Secretary shall take into consideration the number, quality, and promise of the applications; and to the extent practicable, the geographic distribution of such awards; and the distribution of such awards between urban and rural applicants.
- Changes "plans" to "applications" and removes the requirement that an application for a partnership grant "provide for the conduct of a scholarship component." It also expands the contents of the application to include descriptions of how the entity will meet the requirements of program activities, define cohorts of students to be served, and coordinate with existing programs.
- Permits grantees to provide matching funds over the duration of the grant award period if the grantee makes substantial progress towards meeting the match in each year of the grant award period.
- Authorizes grantees to request a reduction of the matching percentage requirement if they can demonstrate a change in circumstances due to a significant economic hardship or if matching funding is no longer available and it has exhausted its reserves.
- Encourages eligible entities to provide student aid to participants by treating every non-federal dollar as two dollars for the purpose of satisfying the matching requirement.
- Amend the matching requirement to include funds "obligated," instead of "paid," to students from State, local, institutional, or private funds as well as "equipment and supplies, cash contributions from non-Federal sources, transportation expenses, in-kind or discounted program services, indirect costs, and facility usage."
- Amends the early intervention activities provided under current law to distinguish between Required Activities and Permissible Activities.
- Required Activities: Both States and partnerships are required to provide financial aid information, encourage enrollment in rigorous coursework, and support activities designed to improve the number of participating students who complete secondary school, and enroll in a program of postsecondary education. State grantees are further required to provide scholarships. The law requires both State and Partnership grantees to engage in at least one of several optional activities including mentorship, outreach, support services, curricular development, support for dual enrollment, and, in the case of a partnership, support for scholarships. As part of an entity's required activities, in order to receive a GEAR UP grant, the entity shall demonstrate to the Secretary that the entity will provide comprehensive mentoring, outreach and supportive services to participating
- Permissible Activities: Adds financial and economic literacy education, special programs or tutoring in science, technology, engineering or mathematics to the list of permissible student support activities. Other permissible activities include fostering parental involvement, disseminating information, and additional activities for States. The bill allows grantees to continue to provide services to students through completion of secondary school and into the first year of college.
- Amend the current priority for services to students for entities that do not use a cohort approach.
- Allows entities in partnerships to collaborate in providing matching resources (as long as the applicant provides the sources of those matching funds at the time of application) and participate in other activities.
- Identifies providers who may deliver services under the State grant program and includes: community-based organizations, schools, institutions of higher education, public and private agencies, nonprofit and philanthropic organizations, businesses, institutions and agencies sponsoring programs authorized under subpart 4, and other organizations the State determines appropriate.
- Requires State grantees to reserve 50 to 75 percent of funds received for scholarships. An amendment allows state grantees to use less than fifty percent for scholarships if other funds for scholarships can be demonstrated. The law requires State grantees to notify students of their eligibility for scholarships.
- Requires State grantees to establish a scholarship trust fund to hold in reserve an amount that is not less than the scholarship amount multiplied by the number of students estimated to be eligible for a scholarship upon enrollment in an institution of higher education. The unused funds must be returned to a grantees' trust fund for redistribution to other eligible students; funds unused after redistribution must be returned to the Secretary.
- Authorizes GEAR UP for $400,000,000 for FY 09 and such sums as may be necessary for the four succeeding fiscal years.
Section 405 Academic Achievement Incentive Scholarships
- The bill eliminates the Academic Achievement Incentive Scholarships program.
Section 406 Federal Supplemental Educational Opportunity Grants
- Authorizes the appropriation of such sums as may be necessary for the FSEOG program at such sums as may be necessary for FY 09 and each of the five succeeding fiscal years.
- Increases the allowance for books and supplies used in calculating each institution of higher education's average cost of attendance for purposes of allocating funds to institutions of higher education according to "fair share" allocation procedures from $450 to $600.
Section 407. Leveraging Educational Assistance Partnership Program
- Retains an authorization level for FY 09 at $200,000,000 and such sums as necessary for the next five succeeding years, with a reservation that for any fiscal year for which the amount appropriated exceeds $30,000,000, the excess amount shall be available to carry out the revised Grants for Access and Persistence (GAP) program which formerly the SLEAP program.
- Raises the maximum LEAP grant to $12,500 from $5,000 capped at the amount of the program's cost of attendance.
- Removes the requirement that non-federal matching funds for LEAP grants and work-study come only from direct state appropriations. State funds do not need to be provided by "direct appropriation."
- Adds a requirement that states notify students that the grants are a part of LEAP and are funded by the federal government and the states, and where applicable, other contributing partners.
- Repeals the Special LEAP program and replaces it with new "Section 415E. Grants for Access and Persistence." Community-based organizations can be partners in the program.
- Requires states to apply for GAP funds in partnerships with institutions of higher education and other organizations and determine the federal share based upon the share of students the partner institutions of higher education enroll. If partner institutions of higher education enroll less than half of FTEs in the state then the Federal contribution is set at fifty-seven percent. If partner institutions of higher education enroll more than half of full-time equivalent students in the state, then the Federal contribute is 66.66 percent. The non-Federal share may consist of cash or fairly evaluated in kind contributions such as room and board or transportation passes that helps meet the student's COA, but such in kind contribution such as room and board cannot be considered as an asset or income for either the student or the student's parent for purposes of Title IV Part F Need Analysis determinations.
- Requires the state to track participation and degree completion of students receiving grants under this program.
- Requires a description of the steps the State will take to ensure students who receive grants persist to degree completion.
- Requires states to have a method in place to identify eligible low-income students and that the state will provide notification to eligible low-income students of LEAP Grants funded by the Federal Government and the state, and where applicable, other contributing partners.
- Provides for partnerships between state agencies and institutions of higher education that require the partnership to consist of not less than one public and one private institution of higher education in the state and at least on philanthropic organization or private corporation.
- Sets GAP grant amounts to not less than the average undergraduate tuition and mandatory fees at the public institutions of higher education in the state were the student resides that are of the same type of institution as the institution of higher education the student attends minus all other federal and state aid.
- Contains an early notification provision that requires states to notify low-income students in grades seven through twelve of their potential eligibility for financial aid.
- Contains in the above described notice to middle and high school students a nonbinding estimate of the total amount of financial aid that a lo-income student with a similar income level may expect to receive from the Federal and state aid programs
- Allows states to set reasonable time limits for degree completion.
- Allows states to use up to 2 percent for administrative funds allowance.
- Under the new law, students are eligible for grants if they meet not less than two of the following criteria, with priority given to students meeting all of the following criteria:
- Have an expected family contribution equal to zero or a comparable alternative based upon the state's approved criteria,
- Is eligible for the state's maximum undergraduate award,
- Is participating in, or has participated in, a federal, state, institutional, or community early information and intervention, mentoring, or outreach program, as recognized by the state agency administering activities under this section,
- Is receiving, or has received, an access and persistence grant under this section.
Section 408. Special Programs for Students Whose Families are Engaged in Migrant and Seasonal Farm Work
- Changes the criteria for recruitment under the High School Equivalency Program (HEP) and specifies that placement services designed to place students in postsecondary education may include preparation for college entrance examinations.
- Authorizes stipends to be provided to HEP participants with no requirements on the frequency of distribution. Other essential services may include transportation and child care.
- Authorizes the HEP to provide other activities to improve persistence and retention in higher education.
- Modifies the criteria for outreach and recruitment services under the College Assistance Migrant Program (CAMP) to include individuals whose immediate family has spent a minimum of seventy-five days during the past twenty-four months in migrant or seasonal farm-work.
- Specifies that supportive and instructional services provided under CAMP are intended to improve placement, persistence, and retention in postsecondary education.
- Expands the required follow-up services that grantees must provide to migrant students after they have completed their first year of college.
- Changes the minimum grant amount for each HEP and CAMP project from $150,000 to $180,000.
- Add a new subsection designating the reservation of funds with an amendment that allows the Secretary to reserve not more than half of one percent of funds available for the HEP and CAMP programs for outreach activities, technical assistance, and professional development.
- Requires that the Secretary to make available at least forty-five percent of the remaining funds for HEP grants and at least forty-five percent of the remaining funds for CAMP grants. Any funds remaining after the reservation and allocations must be used to make HEP or CAMP grants based on the number, quality, and promise of the applications. The Secretary must consider the need to provide an equitable geographic distribution of grants.
- Authorize $75,000,000 for HEP and CAMP for fiscal year 2009 and such sums are may be necessary for each of the five succeeding fiscal years.
Section 409. Robert C. Byrd Honors Scholarship Program
- The Robert C. Byrd Honors Scholarship Program is reauthorized through the legislation for such sums as may be necessary for fiscal year 2008-fiscal year 2013. The law now extends eligibility for scholarships to home schooled students. It also adds Adjunct Teacher Corps to Title II, Part C, to incorporate the Foreign Language Partnerships into the Science and Technology Advanced Foreign Language Education Grant Program in Title VI, and to incorporate the Mathematics and Science Incentive program into the Math and Science Scholars program in Title VIII.
Section 410. Child Care Access Means Parents in School
- Increases grants under the Child Care Access program from $10,000 to $30,000 if appropriations for the program equal or exceed $20,000,000 for the fiscal year.
- Redefines low-income student for the purpose of determining program eligibility by aligning the Pell Grant qualification with award years as opposed to fiscal years (as in current law), expanding eligibility to graduate students, and expanding eligibility to individuals in the U.S. on a non-immigrant visa.
- Lowers the threshold for institutional eligibility by lowering the total amount of Pell Grants awarded at the institution of higher education to qualify, from $350,000 to $250,000 only if appropriations for the program equal or exceed $20,000,000 for the fiscal year.
- Requires the Secretary to publicize the availability of the program in the Federal Register, and in other publications, and directly to related organizations. The law changes the timing of reporting requirements to annual reporting instead of reporting every year and a half.
- Modifies language tying continued funding of the four-year grant awards to annual reporting, replacing the current-law mid-cycle check before the third year.
- Authorizes appropriations of such sums as may be necessary (instead of the current law fixed amount) for fiscal year 2009 and the five succeeding fiscal years.
Section 411. Learning Anytime Anywhere Partnerships
Section 412. TEACH Grants
- Directs the Secretary to include in or with the agreement to serve a plain language disclosure explaining the service obligation and the loan repayment consequences for failure to meet the agreement.
- Clarifies that grant recipients in fields that were designated as high-need when the recipient applied for the grant but which are subsequently designated as no longer high-need may fulfill their service agreements in their original field
- Adds authority for the Secretary to waive part or all of the service requirement in extenuating circumstances
- Requires the Secretary to evaluate the effectiveness of TEACH grants with respect to the schools and students served by recipients of the grants within two years of this law's enactment, and every two years thereafter. The report must provide information on the number of TEACH grant recipients; the degrees obtained by such recipients; the location including the school, local educational agency, and State, where the recipients completed service; the duration of such service, and any other data necessary to conduct such report.
PART B - FEDERAL FAMILY EDUCATION LOAN PROGRAM
Section 421. Limitations on Amounts of Loans Covered by Federal Insurance
- Extends authorization of interest subsidies in the Federally Insured Student Loan (FISL) program by two fiscal years (striking 2012 and inserting 2014 and striking 2016 and inserting 2018).
Section 422. Federal Payments to Reduce Student Interest Costs
- Beginning July 1, 2010 all veteran's education benefits will be excluded from being counted in determining eligibility for loans
- Extends the authorization for interest subsidies in FFELP for two fiscal years
- Expands the conditions by which lenders shall determine the eligibility of a borrower for an in-school deferment to include the lender's confirmation of the borrower's half-time enrollment status through use of National Student Loan Data System (NSLDS), if the confirmation is requested by the institution of higher education.
- Requires lenders to provide information to borrowers who receive deferments on unsubsidized Stafford Loans, at the time deferment is granted, on the impact that the capitalization of interest will have on the loan.
- When a loan is transferred from one lender to another, both lenders must notify borrowers of: the effective date of the transfer; the date the current servicer will stop accepting payments; and the date at which the new servicer will begin accepting payments.
- Prohibits guarantors from offering premiums, payments, stock or other securities, prizes, travel, entertainment expenses, tuition payment or reimbursement or other inducements to schools to obtain loans. They also cannot provide unsolicited loan applications to borrowers by mail or by electronic means.
- Guarantors are specifically allowed to conduct exit counseling services at institutions.
- Clarifies that borrower interest rates are not intended to override Section 207 of the Service members Civil Relief Act, which caps interest rates on all types of debt at six percent for active duty service members.
- Clarifies that the applicable interest rate used when calculating special allowance on new loans disbursed after July 1, 2008 is the rate actually paid by the borrower, not the statutorily set interest rate.
Section 423. Voluntary Flexible Agreements
- Requires the Secretary to annually report and compare program outcomes for guarantors both with and without VFAs. Specifically, the report should report on outcomes related to: program integrity, program and cost efficiencies, delinquency prevention, default version; consumer education programs, and the availability and delivery of student financial aid.
Section 424. Federal PLUS Loans
- Specifies that parent PLUS borrowers begin repayment not later than 60 days after disbursement. However, the law also includes provisions from ECASLA that allow parents to choose to defer payments on a PLUS loan until six months after the date the student ceases to be enrolled at least half time.
- Student PLUS borrowers begin repayment six months after the borrower ceases to carry at least one-half of a full-time academic workload.
Section 425. Federal Consolidation Loans
- Requires lenders to disclose information to prospective borrowers, in a clear and conspicuous manner, at the time it provides an application for a consolidation loan. That disclosure must include: whether consolidation would result in a loss of loan benefits, including benefits in the Direct Loan program such as loan forgiveness, cancellation or deferment, including benefit losses on Federal Perkins Loans.
- Extends authority for Consolidation Loans until 2014
Section 426. Default Reduction Program
- Requires lenders and guaranty agencies to ask consumer reporting agencies to which the default of the loan has been reported, to remove the record of default from the borrower's credit history after a loan has been rehabilitated. Limits a borrower ability to rehabilitate a defaulted loan to one time per loan.
Section 427. Requirements for Disbursement of Student Loans
- Beginning on October 1, 2011, institutions with cohort default rates of less than 15 percent for the previous three fiscal years may disburse loans in a single installment for any period of enrollment that is not more than 1 semester, 1 trimester, 1 quarter, or 4 months. Previously the threshold was set at 10 percent.
- The CDR threshold for early disbursements for first-time borrowers is also increased to 15 percent for the previous three fiscal years.
Section 428. Unsubsidized Stafford Loan Limits
- Students enrolled in coursework necessary for enrollment in a graduate or professional program, or students enrolled in a program that is necessary to attain a professional credential or certification to become a teacher, continue to be eligible for the loan limits for which they were eligible prior to the enactment of ECASLA. Undergraduate students pursuing coursework necessary for enrollment in an undergraduate degree or certificate program are eligible for the increased loan limit of $6,000.
Section 429. Loan Forgiveness for Teachers Employed by Educational Service Agencies
- Clarifies that teachers employed by an educational service agency are eligible for teacher loan forgiveness program in Section 428J of the Higher Education Act.
Section 430. Loan Forgiveness for Service in Areas of National Need
- Creates a new Loan Forgiveness for Service in Areas of National Need program under 428K.
- Borrowers employed full-time in any of the following specified occupations/ professions are treated as employed in an area of national need: early childhood educators; nurses; foreign language specialists; librarians; highly qualified teachers; child welfare workers; speech-language pathologists; audiologists; national service; school counselors; public sector employees; nutrition professionals; medical specialists; physical therapists; and superintendents, principals, and other (school) administrators; occupational therapists; and dentists.
- Borrowers will not qualify for loan forgiveness for the same service under both this provision and other loan forgiveness provisions in the Higher Education Act.
- Teachers and other employees of educational service agencies who are employed in areas of national need as defined by this section are eligible for loan forgiveness on the same terms as others so employed.
Section 431. Loan Repayment for Civil Legal Assistance Attorneys
- The bill creates a new section in 428L to establish a Loan Repayment for Civil Legal Assistance Attorneys program to encourage qualified individuals to enter and continue employment as civil legal assistance attorneys.
- Parent PLUS Loans are excluded from eligibility for this program.
- No borrower may receive more than $6,000 in loan forgiveness in any single year capped at a total of $40,000.
- Authorizes the appropriation of $10,000,000 for fiscal year 2009, and such sums as necessary for the five succeeding fiscal years. Awards are made on a first-come, first-served basis depending on available appropriations with a priority provisions spelled out
Section 432. Reports to Consumer Reporting Agencies and Institutions of Higher Education
- Student loans shall be reported to consumer reporting agencies as an "education loan"
Section 433. Legal Powers and Responsibilities
- Prohibits the Secretary from entering into any settlement of a claim under that exceeds $1,000,000, unless the Secretary has asked the Attorney General to review the settlement agreement and issue a written opinion related to such proposed settlement.
Section 434. Student Loan Information by Eligible Lenders
- The bill requires lenders to provide borrowers - at the time of disbursement - thorough and accurate information on the loan in simple and understandable terms. The long list of items that must be included in the disclosures is included in the law.
- Includes information as a new paragraph (5) in Section 433 (b), "Required Disclosure Before Repayment," that requires lenders to disclose to the borrower information on loan repayment benefits offered at the time of repayment.
- Loan servicers do not need to change their organizational format in order to comply with the requirements of Section 433(e). These disclosures can be made by loan, by account, or by borrower.
Section 435. Consumer Education Information
- Requires guaranty agencies to work with institutions of higher education to develop and make available high-quality educational programs and materials to provide training for students in budgeting and financial management, debt management, and financial literacy.
Section 436. Definition of Eligible Institution & Eligible Lender
- Increases the Cohort Default Rate (CDR) threshold to 30 percent beginning in fiscal year 2012. The CDR will now include two years worth of borrower repayment history. Schools with a cohort default rate of more than 30 percent for two consecutive fiscal years may have their eligibility for financial aid revoked.
- Specifies new appeal processes for schools that don't meet the new cohort default rate threshold due to mitigating circumstances. The law also sets forth steps schools must take to maintain eligibility is such circumstances. Some of those steps include: creating a default prevention task force, developing a default prevention plan that must be submitted to the Department, and reviewing the plan with the Secretary who may insert measurable goals into the plan.
- Requires the Secretary to publish annually both cohort default rate data and life of cohort default rates for each category of institution. Institution types include: four-year publics, four-year private nonprofits, two-year publics, two-year private nonprofits, four-year proprietary schools, two-year proprietary schools, and less than two-year proprietary schools.
- Includes an extensive list of prohibited inducements that would disqualify a lender from participating in the FFEL program.
- Schools participating in the school-as-lender program - and all eligible lender trustees - will be required to complete and submit annual compliance audits to the Secretary that show how they are using proceeds from special allowance payments and interest payments. They must specifically show how those funds are being allocated between need-based grant programs and direct administrative expenses. They must also show that those funds are being used to supplement - not supplant - funds that would otherwise be used for need-based grants.
Section 437. Discharge and Cancellation Rights in Cases of Disability
- Effective July 1, 2008, a federal student loan, including a Perkins loan, will be discharged in the case of a student who dies or becomes permanently and totally disabled. Such loans will also be discharged in the case of a student borrower who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, and has lasted or can be expected to last at least sixty months.
- The Secretary may develop safeguards to prevent fraud and abuse in the discharge and cancellation of loans for death, disability, or inability to engage in substantial gainful activity due to a physical or mental impairment expected to result in death.
- Borrowers who receive a permanent total disability rating from the Secretary of Veterans Affairs due to a service-connected condition will be considered permanently and totally disabled.
Section 438. Conforming Amendments for Repeal of Section 439
- The Conferees make necessary conforming amendments to accommodate for the repeal of section 439.
PART C - FEDERAL WORK-STUDY PROGRAMS
Section 441. Authorization of Appropriations
Section 442. Allowance for Books and Supplies
- Increases the allowance for books and supplies used in calculating each institution of higher education's average cost of attendance for purposes of allocating funds to institutions of higher education according to "fair share" allocation procedures from $450 to $600.
Section 443. Grants for Federal Work-Study Programs
- Allows funds to be used to compensate students employed in projects that: (A) teach civics in schools; (B) raise awareness of government functions or resources; or (C) increase civic participation (this includes compensation for training and travel directly related to civic education and participation activities)
- Directs institutions to give priority to the employment of students participating in projects that educate or train the public about evacuation, emergency response, and injury prevention strategies relating to natural disasters, acts of terrorism, and other emergency situations; and ensure that any student compensated receives appropriate training to carry out the educational services required
- Allows the Federal share of work-study student compensation under this subsection to exceed 75 percent
Section 444. Flexible Use of Funds
- Allows institutions to make payments to students affected by a major disaster, for the period of time (not to exceed one academic year) that the students' were prevented from fulfilling work-study obligations
Section 445. Job Location and Development Programs
- Increases the amount of Federal Work Study funds institutions of higher education may use for Job Location and Development programs to not more than 10 percent or $75,000 of their Federal work study allocations, up from not more than ten percent or $50,000
Section 446. Additional Funds for Off-Campus Community Service
- Authorizes "such sums as may be necessary" for 2009-14 to be appropriated to establish a new Off-Campus Community Service Grant program that allows the Secretary to award grants to institutions to recruit and compensate students for off-campus community service employment with priority given to early childhood education projects and activities in preparation for emergencies or natural disasters
Section 447. Work Colleges
- Replaces "work-learning" with "work-learning-service" each place it appears in the Work Colleges program.
- Authorizes "such sums as may be necessary" to be appropriated for the Work Colleges program for fiscal year 2009 through fiscal year 2014
PART D - FEDERAL DIRECT STUDENT LOAN
Section 451. Terms and Conditions of Loans
- Allows Direct Loan borrowers to use the income-based repayment (IBR) plan in the College Cost Reduction and Access Act (P.L. 110-84)
- Excludes time served as a Member of Congress from eligible government service for the Loan Forgiveness for Public Service Employees and defines public health to include nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations, as defined by the Bureau of Labor Statistics. In addition the bill clarifies early childhood education and full-time faculty member at a Tribal College or University.
- Requires the Secretary to ensure that monthly statements on Federal Direct Loan program loans and other Department publications do not contain more than four digits of any individual's social security number
- Prohibits interest from accruing on Direct Loans disbursed on or after Oct. 1, 2008, for eligible military borrowers serving on active duty or performing qualifying National Guard duty during a war or other military operation or national emergency, and for borrowers serving in an area of hostilities qualifying for special pay
- Requires institutions participating in the Direct Loan program to provide disclosures about the loans to borrowers
Section 452. Funds for Administrative Expenses
- Extends authorization for Direct Loan program administrative expenses and for Federal Family Education Loan account maintenance fees through fiscal year 2014.
- Requires the Secretary to have annual financial and compliance audits of all loans owned by the Department and made under the Direct Loan program, and all contracts for Direct Loan program activities
- Requires the Secretary to release its budget justifications to the public upon providing them to Congress and to make quarterly reports publicly available containing the same level of detail as annual reports included in the budget justifications
- Requires the Secretary to have a financial and compliance audit of all guaranty agencies participating under Part B, conducted annually by a qualified independent organization and release the results of both audits to Congress and the public
- Requires the GAO to study the respective costs of the Direct Loan and FFEL programs
Section 453. Guaranty Agency Responsibilities and Payments; Reports and Cost Estimates
- Clarifies that when the Secretary purchases a loan under the Ensuring Continued Access to Student Loans Act, the guaranty agency that previously insured such loan shall cease to have any rights or responsibilities with respect to the loan. The guaranty agency shall maintain a right to a payment they have earned for any loan service performed before the sale.
- Requires the Secretary to provide Congress with detailed implementation, budget and cost information on the student loan purchase program authorized under ECASLA. The budget and cost information must be reported separately for the loan purchase and participation interest purchase programs.
Section 454. Loan Cancellation for Teachers
- Clarifies that teachers employed by an educational service agency are eligible for the teacher loan forgiveness program
PART E - FEDERAL PERKINS LOANS
Section 461. Extension of Authority/Program Authority
- Authorizes the appropriation of $300 million annually for federal capital contributions to the Federal Perkins Loan program for fiscal years 2009-14
- Extends the authorization of "such sums as may be necessary" for fiscal year 2014 through fiscal year 2019 of appropriations for federal capital contributions, to enable students receiving Perkins Loans for academic years ending prior to Oct. 1, 2014, to continue or complete their courses of study
Section 462. Allowance for Books and Supplies
- Increases the allowance for books and supplies used in calculating each institution of higher education's average cost of attendance (used to allocate federal capital contributions to institutions) from $450 to $600
Section 463. Agreements with Institutions
- Allows institutions that unknowingly failed to maintain an acceptable collection record on a defaulted Perkins Loan to refer the loan to the Department, without recompense, except that the amount collected shall be repaid to the referring institution of higher education within 180 days of collection and shall be treated as an additional federal capital contribution
- Notes that the Secretary lacks authority to require assignment of defaulted Perkins loans and any funds collected from defaulted Perkins loans, including loans assigned to the Department for additional collection activities, be returned to the institution's revolving fund for new loans to future students
- Prohibits administrative measures that weaken the program by reducing funds available to lend to students and clarifies that the Secretary can only assign defaulted Perkins Loans to the Department when an institution has knowingly failed to maintain collection records (the fact that a loan has been in default for any period of time does not mean that the institution has failed to perform due diligence in its collection and is not grounds for the Secretary to require the assignment of the loan)
Section 464. Perkins Loan Terms and Conditions
- Increases annual Perkins Loan limits from $4,000 to $5,500 for undergraduate students and from $6,000 to $8,000 for graduate and professional students
- Increases aggregate Perkins Loan limits from $20,000 to $27,500 for undergraduate students who have completed two years of study, from $40,000 to $60,000 for graduate and professional students, and from $8,000 to $11,000 for all other students
- Makes the death or disability discharge of Perkins loans consistent with how other federal loans are discharged
- Removes the requirement that borrowers of Perkins Loans request forbearance in writing and requires that the terms of forbearance agreed to by the borrower and the lending institution must be documented and recorded in the borrower's file
- Reduces the number of on-time, consecutive, monthly payments required for rehabilitation of a Perkins Loan from 12 to nine
Section 465. Cancellation for Public Service
- Provides Perkins Loan cancellation for a full-time teacher's service during an academic year at an educational service agency
- Expands existing Perkins Loan cancellations to include service in a pre-kindergarten or child care program licensed or regulated by the State, as a full-time fire fighter, as a full-time faculty member at a Tribal College or University, as a librarian with a master's degree in library science at a low-income school, or in a public library serving low-income schools, and for full-time speech language pathologist with a master's degree working exclusively at low-income schools
Section 466. Sense of Congress Regarding Federal Perkins Loans
- Provides a sense of Congress that the Federal Perkins Loan Program is an important part of Federal student aid, and should remain a campus-based aid program at colleges and universities
PART F - NEED ANALYSIS
Section 471. Cost of Attendance
- Excludes the value of military housing or a military housing allowance from consideration as untaxed income or benefits in the need analysis formula, effective July 1, 2010
Section 472. Discretion to Make Adjustments
- Allows financial aid administrators to use discretion to consider nursing home expenses, other medical-related expenses and dependent care expenses to adjust to a student's expected family contribution
- Allows financial aid administrators to use discretion to consider students or dependent students' parents' dislocated worker status to adjust EFC
- Allows financial aid administrators to use discretion to offer unsubsidized Stafford loans to dependent students whose parents do not support them and refuse to complete a FAFSA
Section 473. Definitions
- Authorizes the Secretary to issue regulations that allow the use of the second preceding tax year information to simplify the FAFSA and the application process. This may include data sharing between the IRS and the Department of Education with the taxpayer's permission
- Stipulates that students living in military housing or receiving a basic allowance for housing shall receive an allowance for board, but not for room, when determining the cost of attendance
- Changes CCRAA to clarify that the following students are considered independent: orphans, those in foster care, or wards of the court, or those that were orphans, in foster care, or a ward of the court at any time when the individual was 13-years-old or older, or was immediately prior to attaining the age of majority, an emancipated minor or in legal guardianship as determined by a court
- Excludes any income earned from work under a cooperative education program at an institution of higher education when considering EFC.
- Exclude veteran's education benefits from being counted as available financial assistance when determining eligibility for federal student financial aid, effective July 1, 2010
PART G - GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE
Section 481. Definitions
- Clarifies that the Secretary may reduce the number of weeks of instruction for programs that measure program length in credit hours or clock hours, but may not waive the requirement for institutions of higher education that solely measure student learning based on direct assessment
Section 482. Master Calendar
- Require the Secretary, prior to the beginning of each award year, to provide institutions with a list of all reports and disclosures required under the HEA, including, the date each report or disclosure is due, required recipients of each report or disclosure, the required content of each report or disclosure, and references to statutory authority, applicable regulations, effective July 1, 2010
Section 483. Improvements to Paper and Electronic Forms and Processes
- Includes provisions pertaining to common financial aid forms and directs the Secretary to make the FAFSA consumer-friendly, and make it available in formats that are accessible to individuals with disabilities.
- Requires the Secretary to encourage applicants to file the electronic version of the FAFSA, although the paper version will continue to be made available
- Requires the Secretary to develop an EZ FAFSA for individuals eligible for auto-zero EFC, those eligible for simplified needs test (SNT) and to use the simplified paper application form after appropriate field testing
- Requires that EZ FAFSA contains only elements necessary to determine student eligibility for federal student aid if such applicant is eligible for auto-zero EFC or SNT
- Requires the Secretary to include State data items necessary to award State financial assistance, unless that State does not permit use of the EZ FAFSA
- Prohibits charging a fee for collecting, processing or delivery of financial aid through the use of the EZ FAFSA
- Requires data collected from the EZ FAFSA to be available without charge to institutions, guaranty agencies and states for loan application processing and determining need and eligibility for institutional and State financial aid awards.
- Requires the Secretary to maintain the FAFSA in a printable form and provide a printed copy of the full paper version of FAFSA upon request. The Secretary must also report periodically to Congress the impact of the digital divide on students applying for Title IV aid and the impact on students underrepresented in higher education.
- Requires the Secretary to produce and offer an electronic version of the FAFSA and to develop a simplified electronic application for auto-zero EFC and SNT eligible students
- Requires that students who are both auto-zero EFC and SNT eligible be required to submit only the data necessary to determine their eligibility for auto-zero EFC and SNT and include space on the electronic form for State data, except that a student shall be required to enter data only for his/her State.
- Permits the Secretary to assign PINs to applicants to allow applicants to sign the electronic version of the FAFSA
- Requires the Secretary to "continue to work with" the Social Security Administration to minimize the time it takes for a student to obtain a PIN
- Requires the Secretary to work to reduce the number of FAFSA data elements by 50 percent and submit a report on the reduction process
- Specifies that the number of state items on the form shall not be less than the number of items in award year 2008-2009
- Requires the Secretary to review data annually to determine which items a State needs to award need-based aid and whether the State permits an applicant to file a simplified form
- Requires the Secretary to publish an annual notice in the Federal Register requiring States to inform the Secretary what State-specific data are required to deliver State need-based aid and if the State does not permit applicants to use a simplified form
- Requires that if a State does not permit applicants to use a simplified form the Secretary may decide not to include the State's questions on the FAFSA
- Prohibits people, commercial entities, or other entities from requesting or utilizing an applicant's PIN for purposes of submitting a form on an applicant's behalf
- Requires the Secretary to permit students to complete the FAFSA as early as practicable prior to January 1 of the student's planned year of enrollment
- Directs the Secretary to consult with States, institutions and others with experience in financial aid to develop ways to provide students with an early estimate of their financial aid eligibility, with the disclaimer that EFC is subject to change
- Provides private organizations and consortia that develop software used by Title IV participating institutions that ED will provide the necessary specifications to produce and distribute software in a timely manner
- Authorizes the Secretary to include space for parent's social security number and date of birth on the FAFSA
- Requires the Secretary to test and implement a toll free telephone number for the FAFSA application system within two years of the bill becoming a law for FASFAA filing over the phone for SNT and zero EFC eligible applicants
- Authorizes applicants to use a preparer for consultative or preparer services and requires any entity that provides any value-added service such as completion or submission of the FAFSA to provide a clear and conspicuous notice that the FAFSA is free, can be completed without professional assistance, and provide a link to the Department of Education's Web site. The provider cannot charge recipients who qualify for SNT or auto-zero EFC.
- Creates an early application and demonstration program to determine the benefits and costs of early notification within two years of the bill's enactment of this Act. All dependent students who participate and who are also auto-zero EFC eligible shall be provided with an estimated EFC and Pell Grant award amount for the first year.
- Designates States, institutions and secondary schools to participate in the early application and demonstration program and specifies that the secondary school must commit select resources and participate in an evaluation.
- Specifies that the application must contain certain assurances, such as the amount of state need-based aid available, a commitment to provide actual awards and estimates, and a plan to recruit institutions that serve different populations. Information provided will be an estimate and all participating dependent students must receive estimated awards.
- Authorizes the Secretary to waive Title IV requirements or regulations for an institution of to participate in the demonstration program if they make the demonstration program unworkable, but a waiver of the maximum grant or loan awards is prohibited
- Requires the Secretary to conduct an evaluation of the demonstration program including the extent that estimated awards differ from actual awards
- Requires the Secretary to consult with the Advisory Committee on Student Financial Assistance in implementing the pilot program
- Requires the Comptroller General and the Secretary, in consultation with a study group, to design and conduct a study to simplify the FAFSA process and identify changes to the need analysis formula that will be necessary to reduce the amount of financial information students and families need to provide to receive a determination of an eligibility. The Secretary, with the Secretary of the Treasury, may use IRS data to pre-populate the FAFSA if this doesn't negatively impact students, institutions, states or the federal government.
- Requires the Secretary to use the savings produced by not printing the full paper FAFSA to improve access to the electronic forms for low-income students
Section 484. Model Institutions Financial Aid Offer Form
- Directs the Secretary to report on the adequacy of the financial aid offer forms provided by institutions of higher education to students and their families, including a model financial aid offer form which includes: cost of attendance the amount of aid that does not have to repaid, and types and amounts of loans, for which the student is eligible. The Secretary must convene a group to make recommendations to improve financial aid offer forms
Section 485. Student Eligibility
- Eliminates the exemption for students from the Republic of the Marshall Islands and the Federated States of Micronesia from providing social security numbers when applying for aid
- Allows institutions to determine that a student has the ability to benefit from postsecondary education if the student satisfactorily completes six credit hours or the equivalent coursework applicable toward a degree or certificate offered by the institution of higher education
- Reduces aid eligibility for distance education students if the financial aid administrator uses discretionary authority to determine that distance education results in substantially reduced cost of attendance.
- Allows a student who has lost aid eligibility due to a drug conviction to regain eligibility for Title IV aid if the student successfully passes two unannounced drug tests conducted by a drug rehabilitation program
- Permits students with certain intellectual disabilities to receive Pell Grants, FSEOG, and Federal Work Study under certain circumstances for the first time
- Requires the Secretary to analyze data from the FAFSA containing information regarding the number, characteristics, and circumstances of students denied Federal student aid based on a drug conviction while receiving federal aid.
- Authorizes the Secretary in cooperation with the Treasury Secretary to obtain from the IRS tax information for the purpose of prepopulating the FAFSA or for verification purposes. Consent of the taxpayer to accomplish these purposes is required
Section 486. Statute of Limitations and State Court Judgments
- Prohibits institutions in the Perkins Loan program from being subject to a defense raised by a borrower on the basis of a claim of infancy under state law
- Prohibits a deceased student's estate or the estate of a deceased student's family from being required to repay any Title IV financial assistance, nor interest, collection costs, or other charges
Section 487. Readmission Requirements for Service Members
- Requires any institution that requires students, who are current or retired members of the Armed Forces, and has their attendance interrupted by a call to active duty to subsequently reapply for readmission at the conclusion of active duty to justify this requirement in writing to the Secretary and establishes a standard process for these students to re-enroll in the same academic standing. This process modeled after the process established for service members to return to employment after serving on active duty.
Section 488. Institutional and Financial Assistance Information for Students
- Requires each institution to disclose information about plans to improve the academic program to current and prospective students
- Alters the requirement that institutions disclose terms and conditions of FFEL and Direct Loans to include Perkins Loans
- Requires institutions to develop plans to detect and prevent unauthorized distribution of copyrighted material on information technology systems, including offering alternatives to illegal-downloading or peer-to-peer distribution of intellectual property
- Requires institutions to disclose information on student body, diversity, the placement in employment and types of employment obtained by graduates, the institutions report on fire safety, and the retention rate of certificate or degree-seeking, full-time undergraduate students
- Requires institutions to disclose policies on all vaccinations
- Allows an institution to adjust the calculation of completion and graduation rates. If the number of students who leave school to serve in the Armed Forces, on official church missions, or with a recognized foreign aid service of the Federal government represent more 20 percent or more of certificate- or degree-seeking, full-time undergraduate students, the institution may exclude the time such students were not enrolled from the calculation.
- Requires institutions to disaggregate data on completion and graduation rates based on student gender, race/ethnicity, and receipt of a Pell Grant, receipt of specific federal loans but not a Pell Grant, and non-receipt of a Pell Grant or specific federal loans, but does not require disclosure of data if reporting would not yield statistically reliable information or would reveal personally identifiable information
- Requires exit counseling to borrowers by institutions to include:
- Information on available repayment plans, including different features of each plan and sample information showing average anticipated monthly payments, and the difference in interest paid and total payments, under each plan
- Debt management strategies designed to facilitate repayment
- An explanation that the borrower has options to prepay each loan, pay each loan on a shorter schedule, and change repayment plans
- A general description of the terms and conditions of full or partial loan forgiveness programs or cancellation of the principal and interest programs, and a copy of the information provided by the Secretary
- A general description of the terms and conditions of forbearance programs that may allow the borrower to defer repayment of principal or interest or be granted forbearance, and a copy of the information provided by the Secretary
- The consequences of defaulting on a loan, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation
- Information on the effects of using a consolidation loan to discharge the borrower's loans, including:
- effects on total interest to be paid, fees to be paid, and length of repayment;
- effects on borrowers' underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities;
- the option of the borrower to prepay the loan or to change repayment plans; and
- that borrower benefit programs may vary among different lenders;
- A general description of the types of tax benefits that may be available to borrowers; and
- A notice to borrowers about the availability of the National Student Loan Data System and how the system can be used by a borrower to obtain information on the status of the borrower's loans
- New provisions on calculation of completion and graduation rates of student athletes allows institutions to exclude the time students who leave school to serve in the Armed Forces, on official church missions, or with a recognized foreign aid service of the Federal government if these students represent 20 percent or more of certificate- or degree-seeking, full-time undergraduate students
- Excludes foreign institutions from having to disclose their campus security policies and campus crime statistics
- Requires greater coordination between campus security and local law enforcement
- Adds four crimes to the list of crimes an institutions must report
- Requires institutions to disclose a statement of current campus policies regarding immediate emergency response and evacuation procedures to notify the campus community of a significant emergency or dangerous situation that poses a threat to students or staff
- Requires institutions to notify the campus community in the event of a significant emergency and publish the procedures to immediately notify the campus community upon the confirmation of a significant emergency or dangerous situation, unless this would compromise efforts to contain the emergency.
- Requires the Secretary to report annually on institutions' compliance with this subsection on campus crime and safety and on the Secretary's monitoring of this compliance and permits the Secretary to seek guidance from the Attorney General to develop and disseminate best practices related to campus crime and safety
- Requires institutions to publicly disclose current credit transfer policies, including any criteria used to evaluate transfer of credit earned at another institution and a list of institutions that it has established an articulation agreement with
- Nothing in this subsection authorizes the Secretary or the Accreditation and institutional Quality and Integrity Advisory Committee or NACIQI to require particular credit transfer policies, procedures, or practices. Nothing in this section authorizes an officer or employee of the Department to exercise any direction, supervision, or control over the curriculum, instruction, administration, or personnel at any institution of higher education or over any accrediting agency, limits the application of the General Education Provisions Act, or creates a legally enforceable right on the part of a student to require an institution of higher education to accept a transfer of credit.
- Requires institutions to report and make public an annual fire safety report and requires the Secretary to make policies public, including the installation of fire detection and prevention technologies in student housing, dormitories, and other buildings
- Requires institutions to implement procedures for managing reports of missing persons and notify on-campus residing students to that the institution is required to notify a parent or guardian 24 hours after the time that the student is deemed to be missing
- Requires institutions to provide each student, upon enrollment, with a "separate, clear, and conspicuous written notice" that provides information on the penalties associated with drug-related offenses
- After being notified by the Secretary that a student has lost aid eligibility due to a drug-related offence, institutions must notify the student in a "reasonable and timely manner" in a "separate, clear, and conspicuous written notice" of the loss of aid eligibility and ways to regain eligibility
- Requires institutions to provide comprehensive information on the terms and conditions of loans and borrowers' responsibilities prior to loan disbursement to a first-time borrower. Information shall be provided in simple and understandable terms and may be provided: during an entrance counseling session conducted in person; on a separate written form provided to the borrower that the borrower signs and returns to the institution of higher education; or, online, with the borrower acknowledging receipt of the information. Institutions of higher education are encouraged to provide entrance counseling through interactive programs that test borrowers' understanding of the terms and conditions of their loans.
Section 489. National Student Loan Data System
- Requires the Secretary to take actions to maintain the system, to prepare and submit a report annually, describing certain specified aspects of NSLDS, to conduct a study regarding the available mechanisms for providing students and parents the ability to opt in or opt out of allowing eligible lenders to access their records in NSLDS, and the appropriate protocols for limiting access to NSLDS, effective three years after enactment.
Section 490. Early Awareness of Financial Aid Eligibility
- Requires the Secretary to cooperate with other relevant entities to implement a comprehensive system of early financial aid information in order to provide students and families with early information about financial aid
Section 491. Distance Education Demonstration Program
- Makes technical changes and adds language requiring Secretary to report annually on the program.
Section 492. Articulation Agreements
- Requires Secretary to work with States to develop more comprehensive articulation agreements
Section 493. Program Participation Agreements
- Moves the 90/10 rule from an institutional eligibility requirement for proprietary institutions to a Program Participation Agreement requirement. A proprietary institution must have not less than 10 percent of its revenue from sources other than Title IV funds.
- When requested, institutions must disclose to the alleged victim of any violent crime or nonforcible sex offense the final results of any institutional disciplinary proceeding conducted against the alleged perpetrator of such crime or offense. The alleged victim's next of kin must be informed, if the alleged victim dies as a result of the crime.
- Requires institutions that maintain a preferred lender list for Federal loans and/or private loans, if recommended by the institution, to:
- Provide not less than the information that must be disclosed under Section 153(a)(2)(A)
- State why each lender on the list was selected, particularly with respect to terms and conditions or provisions favorable to the borrower
- Inform students and families that they do not have to borrow from a lenders on the list
- Provide at least three FFELP lenders that are not affiliates (using a list of lender affiliates provided by the Department) and/or two private loan providers that are not affiliates on the lender list
- Specifically indicate, for each listed lender, whether the lender is an affiliate of other lenders on the list and describe details of any affiliations
- Prominently disclose the method and criteria used to select lenders to ensure that lenders are selected for borrowers' best interests, including:
- payment of origination or other fees on behalf of the borrower
- highly competitive interest rates, or other terms and conditions or provisions of loans under this title or private education loans
- high-quality servicing for such loans; or
- additional benefits beyond the standard terms and conditions or provisions for such loans
- Exercise a duty of care and a duty of loyalty to compile the list without prejudice and for the sole benefit of students and families
- Not deny or impede the borrower's choice of a lender or cause unnecessary delay in loan certification for borrowers who choose a lender that is not on the list; and
- Comply with other regulatory requirements prescribed by the Secretary,
- Requires the Secretary to maintain and regularly update a list of lender affiliates of all eligible lenders, and provide the list to institutions to help develop preferred lender lists.
- Requires institutions to prominently disclose the method and criteria used to select lenders on PLLs to ensure that the lenders are selected on the basis of the best interest of the borrowers. List needs updated annually
- Schools must comply with the new Section 128(e)(3) Truth in Lending Act modification which is described in this document at Title X.
- Increases what proprietary institutions may count as revenue toward their 10 percent of non-Title IV revenue
- Includes as revenue from tuition and fees, only those tuition, fees and other institutional charges for students enrolled in programs eligible of assistance under Title IV. Specifies that funds paid by a student, or on behalf of a student by a party other than the institution, for an education or training program that is not eligible for funds under title IV, may be counted as institutional revenue, provided that the program is both approved or licensed by the appropriate State agency and is accredited by an accrediting agency recognized by the Secretary or provides an industry-recognized credential or certification.
- Specifies certain institutional aid provided to students as institutional revenue. For each fiscal years from 2009-12, the principal amount of loans made by an institution to a student, based on the expected interest earned less the estimated amount to account for future defaults and loan forgiveness, accounted for on an accrual basis, in accordance with Generally Accepted Accounting Principles and related standards and guidance, and that meet other specified conditions, are deemed to be institutional revenue. For an institution's fiscal year 2013 and each of an institution's subsequent fiscal years, only the amount of repayments on loans made by an institution to students received during the fiscal year for which compliance with the 90/10 rule is determined is deemed to be institutional revenue. For loans made by an institution, disbursed between July 1, 2008 and July 1, 2012, the net present value of loans made by the institution, accounted for on an accrual basis and, estimated in accordance with Generally Accepted Accounting Principles and related standards and guidance, and that meet other specified conditions, are deemed institutional revenue.
- Specifies scholarships provided by the institution as institutional revenue. This includes scholarship funds in the form of monetary aid or tuition discounts based upon the academic achievements or financial need of students; disbursed from an established restricted account; and funded by outside sources or income earned on such funds.
- Requires institutions to presume that any Title IV program funds disbursed or delivered to or on behalf of a student is used to pay the student's tuition, fees, or other institutional charges. Even if the institution credits those funds to the student's account or pays those funds directly to the student - except to the extent that the student's tuition, fees, or other institutional charges are satisfied by:
- Grant funds provided by non-Federal public agencies or private sources independent of the institution;
- Funds provided under a contractual arrangement with Federal, State, or local government agencies for the purpose of providing job training to low-income individuals who are in need of that training; or
- Funds used by a student from savings plans for educational expenses established by or on behalf of the student and which qualify for special tax treatment under the Internal Revenue Code - provided that the institution can reasonably demonstrate such funds were used to pay the student's tuition, fees, or other institutional charges.
Additionally, the bill provides an exception for scholarships provided by the institution in the form of monetary aid or tuition discounts and that meet other specified conditions and remove the condition that institutions must demonstrate that funds from savings plans that qualify for special tax treatment were used to pay a student's tuition, fees, or other institutional charges.
- Clarifies that, for loans received by students between July 1, 2008 and July 1, 2011, the amount of loan funds for 428H or Federal Direct Unsubsidized Stafford Loans that exceed that loan limits that were in effect prior to May 7, 2008 shall be counted as revenue received by the institution.
- Specifies that certain revenues are to be excluded by an institution in determining compliance with the 90/10 rule. These include Federal Work-Study program funds, unless the institution uses those funds to pay a student's institutional charges, Leveraging Education Assistance Partnership program funds, funds used to match title IV program funds, Title IV program funds that must be refunded or returned, and funds from the sale of books, supplies, and equipment unless the institution includes that amount as tuition, fees, or other institutional charges.
- Eases penalties for proprietary institutions that fail to comply with the 90/10 rule. Those that don't comply for two consecutive fiscal years may be placed on provisional certification and may become ineligible to participate in Title IV programs for at least two fiscal years beginning the fiscal year after the institution failed to comply. To regain Title IV eligibility, the institution must demonstrate compliance with all eligibility requirements for at least two fiscal years after the year that the institution failed to comply with the 90/10 rule.
- Requires the Secretary to submit a report on July 1 and subsequent annual reports every July 1 with the result of the calculation of the percentage of revenue derived from Title IV sources of funds for each proprietary institution
- Mandates schools's have a code of conduct and requires that officers, employees, and agents of institutions that have loan responsibilities are informed annually about the institution's code of conduct
- Requires institutions' codes of conduct to prohibit revenue-sharing arrangements on FFELP loans
- Requires codes of conduct to prohibit officers, employees or agents of institutions, and under certain conditions, by the families of officers, employees or agents of institutions, soliciting or accepting gifts from lenders, guarantors, and servicers of education loans. The term gift means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.
- The following are not considered gifts:
- Standard material, activities, or programs related to a loan, default aversion, default prevention, or financial literacy, such as a brochure, a workshop, or training.
- Food, refreshments, training, or informational Material furnished to an officer or employee of an institution, or to an agent, as an integral part of a training session that is designed to improve the service of a lender, guarantor, or servicer of education loans to the institution, if such training contributes to the professional development of the officer, employee, or agent.
- Favorable terms, conditions, and borrower benefits on an education loan provided to a student employed by the institution if such terms, conditions, or benefits are comparable to those provided to all students of the institution.
- Entrance and exit counseling services provided to borrowers to meet the institution's responsibilities for entrance and exit counseling as required by the HEA as long as the institution's staff are in control of the counseling and specific lender's products and services are not promoted.
- Philanthropic contributions to an institution from a lender, servicer, or guarantor of education loans that are unrelated to education loans or any contribution from any lender, guarantor, or servicer that is not made in exchange for any advantage related to education loans.
- State education grants, scholarships, or financial aid funds administered by or on behalf of a State.
- Requires codes of conduct to prohibit contracting and consulting arrangements between an officer or employee of the institution and a lender of an affiliate of a lender, except that institutional employees who are not in the financial aid office can serve on the boards of directors of lenders, guarantors, and servicers of education loans if these employees do not have loan responsibilities or the institution has a has a written conflict of interest policy that clearly keeps the employee from participating in any decision of the board regarding education loans at the institution. Similarly, the bill allows, under certain conditions, officers, employees and agents of a lender, guarantor, and servicer of education loans to serve as a trustee of an institution.
- Prohibits institutions from assigning, through award packaging or other methods, a first-time borrower's loan to a particular lender or refuse to certify, or delay certification of, any loan based on the borrower's selection of a particular lender or guaranty agency.
- Eliminates "opportunity pool loans" by prohibiting institutions from requesting or accepting any offer of funds for private educational loans in exchange for the institution of higher education providing the lender with a specified number of loans or loan volume, or a preferred lender arrangement for Title IV loans. This does not include any private loan that is guaranteed by an institution (i.e., a recourse loan).
- Bans institutions from receiving staffing assistance with financial aid or via a call center, but permits lenders to provide staffing services on a short-term, nonrecurring basis to assist institutions with financial aid-related functions during emergency situations or for office staff professional development or for providing educational counseling, financial literacy, or debt management materials to borrowers as long as such materials disclose to borrowers the name of the lender that provided or assisted in the preparation of the materials
- Prohibits any financial aid office employees or others with loan or financial aid, who serve on an advisory board, commission, or group established by a lender, from receiving anything of value from the lender, except reimbursement for reasonable expenses incurred in serving on such advisory board, commission or group.
- Requires the Inspector General to submit an annual report identifying all substantiated violations of the gift-ban provision
- Requires institutions to develop a teach-out plan (to provide equitable treatment of students if an institution ceases to operate before all students have completed their program) to be submitted accrediting agencies if the Secretary initiates a limitation, suspension, or termination of the institution in any program under Title IV or initiates an emergency action against the institution.
- Allows institutions to comply with voter registration requirements by transmitting voter registration information electronically to students, provided that the electronic message only include voter registration information
Section 494. Regulatory Relief and Improvement
- Requires the Secretary to continue voluntary participation of any experimental sites in existence as of July 1, 2007, unless the Secretary determines that such site's participation has not been successful in carrying out the purposes of this section. Any activities that have not been successful shall be discontinued by June 30, 2009.
Section 494A. Transfer of Allotments
- Permits institutions, in addition to the current flexibility a schools has, now to also be able to transfer up to 25 percent of their FSEOG allotment to the Federal Work Study program and transfer up to 25 percent of their Federal Work Study allotment to federal capital contributions for the Federal Perkins Loan program
Section 494B. Purpose of Administrative Payments
- Makes a minor wording change to language describing the purpose of administrative payments for the Pell Grant program, the campus-based programs, and the immigration status verification system
Section 494C. Advisory Committee on Student Financial Assistance
- Specifies that four members shall be appointed by the President pro tempore of the Senate, four members shall be appointed by the speaker of the House of Representatives, and three members shall be appointed by the Secretary.
- Requires the ACSFA to conduct a study of innovative pathways to baccalaureate degree attainment, such as dual enrollment, Pell program changes, and compressed or modular scheduling, among other things
Section 494D. Regional Meetings and Negotiated Rule-Making
- Adds state student grant agencies to the list of examples of groups involved in Title IV student financial assistance programs
- Requires participants in the negotiated rulemaking process be selected by the Secretary from individuals who are nominated by groups identified to provide the Secretary with advice and recommendations on the development of proposed regulations, and that these individuals must have recognized legitimacy as designated representatives of major stakeholders, sectors, and constituencies in the higher education community and with demonstrated expertise or experience in the relevant subjects under negotiation.
Section 494E. Year 2000 and Requirements at the Department
- Repeals Year 2000 requirements for the Department of Education
Section 494F. Technical Amendment of Income-Based Re-Payments
- Clarifies that a borrower may elect to participate in the income-base repayment plan if their loan had been in default in the past but was subsequently rehabilitated
PART H - PROGRAM INTEGRITY
Section 495. Recognition of Accrediting Agency or Association
- Requires accrediting agencies to apply and enforce standards that respect the stated mission of the institution of higher education, including religious missions
- Requires accrediting agencies that have or seek to include the evaluation of distance education programs within the scope of recognition to demonstrate to the Secretary that standards effectively address the quality of distance education in the same areas in which it is required to evaluate classroom-based programs. Associations are not required to have separate standards for accrediting distance education programs.
- Accrediting agencies do not need to approval of the Secretary to expand scope of accreditation to include distance education, provided that the accrediting agency notifies the Secretary in writing about the change.
- Require a review at the next NACIQI meeting of any agency or association that expands its scope to include the evaluation of institutions or programs offering distance education if an institution accredited by the agency or association experiences a 50 percent or greater enrollment increase within the institution's fiscal year.
- Requires accrediting agencies to require institutions offering distance education to have a process to establish that a student registered for a distance education course is the same student that participates in, completes, and receives credit for the course
- Modifies the requirement that accrediting agencies assess an institution's success with respect to student achievement in relation to the institution's mission, including, as appropriate, consideration of state licensing examinations, course completion rates, and job placement rates to specify that consideration of student achievement in relation to the institution's mission may include different standards for different institutions or programs
- Expands existing due process requirements, including: specification of clear and consistent standards; an opportunity for a written response; an opportunity to appeal any adverse action; the right to representation by counsel; an opportunity for institutions to put forward new evidence that relates to a financial matter; and submission to the Secretary a summary of actions that includes the award of accreditation or reaccreditation of an institution of higher education and several adverse actions.
- Requires an accrediting agency, as part of its accreditation or reaccreditation reviews, to confirm that the institution of higher education has publicly disclosed its transfer of credit policies and that the policies specifically state the criteria used by the institution of higher education regarding the transfer of credit from another institution.
- Requires the agency or association to make decisions of accrediting agencies or associations, including placement on probation, to be made public.
- Requires accrediting agencies to monitor the growth of programs at institutions that are experiencing significant enrollment growth and requires institutions to submit a teach-out plan for approval by the accrediting agency if the accrediting agency withdraws accreditation or the institution notifies the accrediting agency that it will be closing
- Prohibits the Secretary from establishing any criteria that "specifies, defines, or prescribes" standards that accrediting agencies must use to assess any institution of higher education's success with respect to student achievement
- Prohibits the Secretary from issuing regulations on the standards used by accrediting agencies to evaluate the institution's success with student achievement, curricula, faculty
- Establishes a rule of construction that states that no requirement related to an accrediting agency's required review of an institution's success with student achievement, curricula, faculty, and so forth shall restrict an accrediting agency's authority to set and to apply accreditation standards or restrict the authority of an institution to develop and use institutional standards to show success with student achievement
Section 496. Eligibility and Certification Procedures
- Allows a location of a closed institution to be used as an additional location for the purposes of a teach-out, if the teach-out has been approved by the institution's accrediting agency and permits an institution that conducts a teach-out by establishing an additional location at a closed institution to establish a permanent location at the closed institution.
Section 497. Program Review and Data
- Requires the Secretary to provide an institution being reviewed with an adequate opportunity to review and respond to any program review report and relevant materials before any final program review report is issued.
- Requires the Secretary to take into consideration the response from the institution in any final program review report or audit determination
- Requires confidentiality for any program review report until a final program review determination is issued and requires the Secretary to promptly disclose all program review reports to the institution under review. Disclosures to inform the state or accrediting agency when the Secretary takes action against an institution are excluded from the confidentiality requirement.
Section 498. Review of Regulations
- Ends the requirement that the Secretary review and report on regulations for small institutions
PART I - COMPETITIVE LOAN AUCTION PILOT PROGRAM
Section 499. Competitive Loan Auction Pilot Program Evaluation
- Requires the Secretaries of Education and the Treasury, in consultation with OMB, CBO, and the Comptroller General to evaluate the Competitive Loan Auction Pilot Program
- Requires the Secretary to include in the report any recommendations based on the findings of the evaluation for improving the operation and administration of other loan programs
- Guaranty Agencies may serve the same function for lenders making PLUS loans as a result of winning the auctions they do for lenders, except that loans are insured at ninety-nine percent.
TITLE V - DEVELOPING INSTITUTIONS
Section 501. Authorized Activities
- Adds remedial education and English language instruction, articulation agreements and enhancing distance learning academic instruction capabilities as authorized activities.
- Provides for education or information designed to improve the financial and economic literacy of students or their parents.
Section 502. Post baccalaureate Opportunities for Hispanic Americans
- Creates a new program for promoting post baccalaureate opportunities through programs at Hispanic-serving institutions of higher education.
Section 505. Authorization of Appropriations
- Authorizes $175,000,000 for Part A and $100,000,000 for Part B for fiscal year 2009, and such sums as may be necessary for each of the five succeeding fiscal years.
- Establishes a new minimum grant of sufficient size and scope to significantly contribute to the educational program of the eligible institution.
PART B - PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS
Section 511. Purposes
- Includes a new section designating the purposes of the new program for promoting post baccalaureate opportunities at Hispanic-serving institutions of higher education.
Title VII - GRADUATE AND POSTSECONDARY IM0PROVEMENT PROGRAMS
Section 701. Purpose
Section 702. Jacob K. Javits Fellowship Program
Section 703. Graduate Assistance in Areas of National Need
Section 704. Thurgood Marshall Legal Educational Opportunity Program
Section 705. Sense of Congress
Section 706. Masters Degrees Programs at Historically Black Colleges and Universities and Other Minority Serving Institutions
Section 707. Fund for the Improvement of Postsecondary Education
Section 708. Repeal of the Urban Community Service Program
Section 709. Programs to Provide Students with Disabilities with a Quality Higher Education
Section 710. Subgrants to Nonprofit Organizations
TITLE VIII - ADDITIONAL PROGRAMS
Section 801. Project GRAD
- Authorizes a new program to provide funding through a grant for a non-profit organization called Project GRAD USA to support integrated secondary-postsecondary graduation reform efforts. The law establishes the program as a subsection of FIPSE.
Section 802. Mathematics and Science Scholars Program
- Establishes a new competitive grant program that authorizes the Secretary to award competitive grants to states. States would award $8,000 scholarships to first undergraduate students who complete a rigorous high school program in math and science. States must match fifty percent of federal funds and may set priorities for the scholarships. The law authorizes appropriations of such sums as may be necessary fiscal year 2008 through fiscal year 2009.
Section 803. Business Workforce Partnerships for Job Skill Training in High-Growth Occupations or Industries
- Authorizes the Secretary to award competitive grants to partnerships between institutions of higher education and local workforce investment boards, businesses, and labor organizations for development of job training programs in high-growth industries.
Section 804. Capacity for Nursing Students or Faculty
- Authorizes the Secretary to award competitive grants to nursing programs to expand faculty and facilities beginning in academic year 2008-09.
- Establishes a Nurse Faculty Pilot Project which authorizes the Secretary to award competitive grants to fund scholarships and release time for nurses studying for advanced degrees with the intention of becoming faculty. Grants awarded under this section may be used to support partnerships with hospitals or health facilities to improve alignment between nursing education and healthcare delivery methods, fund release time for qualified nurses enrolled in the graduate nursing program and to provide scholarships to qualified nurses in pursuit of an advanced degree with the goal of becoming faculty members in an accredited nursing program.
Section 805. American History for Freedom
- Establishes a new program that authorizes the Secretary to award competitive grants to institutions of higher education to establish or strengthen programs that promote "(1) traditional American history; (2) the history and nature of, and threats to, free institutions; or (3) the history and achievements of Western Civilization." The law authorizes appropriations for fiscal year 2008 through fiscal year 2013.
Section 806. Teach for America
- Authorizes the Secretary to award a grant to Teach For America, Inc. to implement and expand its program of recruiting, selecting, training, and supporting new teachers; and to study the program's effectiveness.
Section 807. The Patsy T. Mink Fellowship Program
- Establishes a new program to award competitive grants to institutions of higher education for fellowships to minorities and women seeking doctoral degrees with the intent of entering the professoriate. Fellowship awards should be given to individuals from groups who are underrepresented in doctoral degree programs, including minorities and women.
- Requires that at least thirty percent of funds would be reserved for institutions of higher education eligible for a grant under Titles III or V.
- Requires each grantee to award a minimum of fifteen fellowships with the grant funds, although the number may be reduced to ten in certain circumstances.
Section 808. Improving College Enrollment by Secondary Schools
- Establishes a new program in which the Secretary must contract with a non-profit organization to conduct a needs assessment and provide comprehensive services to urban school districts and rural states in order to improve college-going rates of participating schools.
Section 811-818. Early Childhood Education Professional Development and Career Task Force
- Includes a program for early childhood development professional development.
- Requires the development of a State Task Force and specifies that a representative from the state educational agency and the State Head Start collaboration director participate in the State Task Force.
Section 819. Improving Science, Technology, Engineering and Mathematics Education with a Focus on Alaska Native and Native Hawaiian Students
- Authorizes the Secretary to award competitive grants to partnerships to develop or expand STEM programs and academic support services and internships for STEM students, with a focus on Alaska Native and Native Hawaiian students.
Section 820. Pilot Programs to Increase College Persistence and Success
- Authorizes the Secretary to award competitive grants to institutions of higher education for scholarships and counseling services for low-income students with dependents.
Section 821. Student Safety and Campus Emergency Management
- Creates a new student safety and campus emergency grant program and allows funds to be used for the acquisition and installation of access control, video surveillance, intrusion detection, and perimeter security technologies.
Section 822. Model Emergency Response Policies, Procedures, and Practices
- Requires the Secretary of Education, in consultation with the Attorney General and Secretary of Homeland Security, to provide these technical assistance and dissemination services.
Section 823. Preparation for Future Disasters Plan by the Secretary
- Requires the Secretary to develop and maintain a disaster relief plan that addresses the needs of institutions of higher education in the event of a natural or man-made disaster that is declared a major disaster or emergency by the President.
Section 824. Education Disaster and Emergency Relief Loan Program
- Establishes a new education disaster and emergency relief loan program for institutions of higher education for direct or indirect losses incurred as a result of a federally declared major disaster or emergency.
Section 825-826. Guidance on Mental Health Disclosures for Student Safety
- Requires the Secretary, not later than 180 days after the enactment of this Act, to provide guidance to clarify the role of institutions of higher education with respect to the disclosure of education records in situations where a student poses a significant risk of harm to himself/herself or others. This guidance must also state that institutions of higher education acting in "good faith" with respect to the disclosure of education records in accordance with the requirements of this Act and Family Educational Rights and Privacy Act of 1974 shall not be liable for that disclosure.
Section 830. Incentives and Rewards for Low Tuition
- Authorizes the Secretary to award grants for low tuition to institutions of higher education for academic year 2008-2009 and any succeeding academic year whose percentage increase in annual net tuition is equal to or less than the percentage change in the relevant Postsecondary Education Price Index (PEPI) for such academic year. The Secretary may also award grants to public institutions of higher education that have a net tuition that is in the lowest quartile of comparable institutions of higher education or have a tuition increase of less than $500 for a full-time undergraduate student.
Section 831-833. Cooperative Education
- Awards grants to institutions of higher education or combinations of institutions of higher education to encourage them to develop and make available work experiences for their students to prepare them for future careers and enable students to support themselves financially while in school.
Section 834-835. Demonstration and Innovation Projects; Training and Resource Centers; and Research
- Authorizes the Secretary to make grants or enter into contracts for demonstration programs, training and resource centers, and research related to cooperative education.
Section 841. College Partnership Grants Authorized
- Establishes a grant program for eligible partnerships of institutions of higher education to support the development and implementation of articulation agreements. An eligible partnership must include at least two institutions of higher education or a system of institutions of higher education.
Section 842. Grants to Create Bridges from Jobs to Careers
- Establishes a new program that authorizes the Secretary to award competitive grants to institutions of higher education to create workforce bridge programs from developmental coursework to occupational certificate programs. Grants offer a priority for institutions of higher education with more than half of students enrolling in developmental coursework.
Section 861-870. Rural Development Grants for Rural Colleges and Universities
- Authorizes the Secretary to award competitive grants to rural institutions of higher education in partnership with rural local education agencies, rural educational service agencies, regional employers, or non-profit organizations increase college enrollment rates among graduates of rural high schools and nontraditional students at rural institutions of higher education.
Section 871. Campus-Based Digital Theft Prevention
- Authorizes the Secretary to award grants to institutions of higher education to develop or improve programs that are designed to reduce illegal downloading on campus.
Section 872. Program to Promote Training and Job Placement of Real Time Writers
- Authorizes the Secretary of Commerce to award competitive grants to institutions of higher education for training and placing students in real time writing jobs. Grants may not exceed $1,500,000 over two years. Scholarship amounts for training are to be determined according to Title IV Part F need analysis.
Section 873. Model Programs for Centers of Excellence for Veteran Student Success
- Authorizes the Secretary to award competitive grants to encourage model programs to support veteran student success in postsecondary education.
Section 881. University Sustainability Programs
- Authorizes the Secretary to award competitive grants to institutions of higher education and partnerships to design and implement sustainability practices. The law requires the Secretary to convene a summit on sustainability in higher education not later than September 30, 2010.
Section 891. Modeling and Simulation Programs
- Authorizes the Secretary to award competitive grants to institutions of higher education to create and enhance modeling and simulation programs. Grants have twenty-five percent by non-federal source matching requirement. The law requires the Secretary to establish a task force to raise awareness of and define the study of modeling and simulation.
Section 892. Path to Success
- Authorizes the Secretary to award competitive grants to community colleges in partnership with juvenile justice systems to provide education and related services to eligible youth in areas with gang activity.
Section 893. School of Veterinary Medicine Competitive Grant Program
- Authorizes the Secretary of Health and Human Services to award competitive grants to veterinary schools or residency programs for veterinarians to increase the number of veterinarians in the workforce.
Section 894. Early Federal Pell Grant Commitment Demonstration Program
- Authorizes the Secretary to establish an early Federal Pell Commitment Demonstration Program and award grants to four state educational agencies to pay the administrative expenses for program participation. The program would provide 8th grade students who are eligible for free or reduced-price lunch with a commitment to receive a Pell Grant during their first year of undergraduate study, provided the student applies for federal financial aid during the student's senior year of high school. Each state would identify two cohorts of 8th grade students to participate in the demonstration program. The two cohorts of students, which shall consist of (1) one cohort of 8th grade students who begin the participation in academic year 2008-2009; and (2) one cohort of 8th grade students who begin the participation in academic year 2009-2010. Each cohort of students shall consist of not more than 10,000 8th grade students who qualify for a free or reduced price meal.
Section 895. Henry Kuualoha Guigni Kupuna Memorial Archives
- Authorizes the Secretary to award a grant to the University of Hawaii Academy for Creative Media for the establishment, maintenance, and periodic modernization of the memorial archives.
Section 802. National Center for Research in Advanced Information and Digital Technologies
- Authorizes the establishment of a nonprofit corporation, National Center for Learning Science and Technology to support a comprehensive research and development program to harness the increasing capacity of advanced information and digital technologies to improve all levels of learning and education, formal and informal, to provide Americans the knowledge and skills needed to compete in the global economy.
Section 803. Establishment of Pilot Program for Course Material Rental
- Authorizes the Secretary to make grants to no more than ten institutions of higher education to develop pilot programs that would allow students to rent textbooks.
TITLE X - PRIVATE STUDENT LOAN IMPROVEMENT
Section 1001. Short Title
- This new Title will be referred to as the Private Student Loan Transparency and Improvement Act of 2008.
Section 1002. Regulations
- Requires the Board of Governors of the Federal Reserve System to issue final regulations to implement these amendments to the Truth in Lending Act (TILA) no later than 365 days after the date of enactment and will go into effect with six months of issuance.
Section 1003. Effective Dates
- Most of the provisions from the bill become effective upon the date of enactment, except for paragraphs 1, 2, 3, 4, 6, 7and 8 of Section 128(e) and Section 140(c) of the TILA, as added by this Title, for which the effective date is the earlier of the date on which regulations are issued under section 1002 or eighteen months after the date of enactment of this Act.
Subtitle A - Preventing Unfair and Deceptive Private Educational Lending Practices and Eliminating Conflicts of Interest
Section 1011. Amendment to the Truth in Lending Act
- Adds a new Section 140 to Chapter 2 that defines: "covered educational institution," "institution of higher education," "postsecondary educational expenses," "private educational lender," "private education loan," "preferred lender arrangement," "gift," and "revenue sharing;"
- Includes prohibitions on gift giving, revenue sharing arrangements, co-branding, advisory board compensation, and prepayment fees and penalties for covered institutions of higher education and private educational lenders.
- A gift means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having more than a de minimis monetary value, including services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred;
- Prohibited inducements do not include: standard informational material related to a loan, default aversion, default prevention, or financial literacy; food, refreshments, training, or informational material furnished to an officer, employee, or agent of a covered educational institution as an integral part of a training session or through participation in an advisory council that is designed to improve the service of the private educational lender to the covered educational institution, if such training or participation contributes to the professional development of the officer, employee, or agent of the covered educational institution; favorable terms, conditions, and borrower benefits on a private education loan provided to a student employed by the covered educational institution, if such terms, conditions, or benefits are not provided because of the student's employment with the covered educational institution; the provision of financial literacy counseling or services, including counseling or services provided in coordination with a covered educational institution, to the extent that such counseling or services are not undertaken to secure loan applications.
- Schools that accept private loans must report annually to the Secretary any reasonable expenses paid by a lender to an employee of the financial aid office and must include the employees' name, title, amount and other details of the expense. The Secretary will compile the reports and make them available to Congress.
Section 1012. Civil Liability
- Amends TILA to permit borrowers of private education loans to bring an action concerning a violation of specified provisions in any United States District Court, or in any other court of competent jurisdiction, within one year following the date on which the first payment of principal is due on the loan, and provides for the award of damages with respect to violations of certain specified disclosures and terms required by Section 128 of TILA, as amended by this law.
- Private educational lenders have no civil liability with respect to section 128(e)(3) of TILA, which requires lenders to obtain a prospective borrower's self-certification of information.
Subtitle B - Improved Disclosures for Private Education Loans
Section 1013. Clerical Amendment
- Provides for a technical amendment.
Section 1021. Private Education Loan Disclosures and Limitations
- Amends TILA by adding a new subsection (e) to Section 128 that requires certain, and comprehensive consumer disclosures at application and solicitation, approval, and consummation of private education loans subject to regulation by the Board.
- The Secretary, in consultation with the Board of Governors of the Federal Reserve System, shall develop the self-certification form for private education loans that shall be used to satisfy the requirements of section 128(e)(3) of the Truth in Lending Act. Such form shall-
- Be developed in a standardized format;
- Be made available to the applicant by the relevant institution of higher education, in written or electronic form, upon request of the applicant;
- Contain only disclosures that-
- The applicant may qualify for Federal student financial assistance through a program under title IV of this Act, or State or institutional student financial assistance, in place of, or in addition to, a private education loan;
- The applicant is encouraged to discuss the availability of Federal, State, and institutional student financial assistance with financial aid officials at the applicant's institution of higher education;
- A private education loan may affect the applicant's eligibility for free or low-cost Federal, State or institutional student financial assistance; and
- The information that the applicant is required to provide on the form is available from officials at the financial aid office of the institution of higher education;
- Include a place to provide information on-
- The applicant's cost of attendance at the institution of higher education, as determined by the institution under Part F of title IV;
- The applicant's expected family contribution, as determined under Part F of title IV, as applicable, for students who have completed the free application for Federal student aid;
- The applicant's estimated financial assistance, as determined by the institution, in accordance with title IV, as applicable;
- The difference between the amounts of the borrower's Cost Of Attendance and estimated financial assistance, as applicable; and
- The sum of the amounts of the borrower's expected family contribution and the difference of the amounts of the borrower's cost of attendance and estimated financial assistance as determined in the paragraph directly above this one, as applicable; and
- Include a place for the applicant's signature, in written or electronic form.
- Nothing in this section shall be construed to create a private right of action against an institution of higher education with respect to the form developed under this provision.
- Requires a model form, to be developed by the Board, based on consumer testing and in consultation with the Secretary of Education, that may be used by private educational lenders for the provision of required disclosures, and a requirement that lenders that have preferred lender arrangements with a covered educational institution must annually provide to such institutions the information the Board determines to include in the model form for each type of education loan the lenders plan to offer to students attending the covered educational institution, or to the families of such students.
- Borrowers have up to thirty calendar days to accept the terms of the loan, during which time the rates and terms of the loan may not be changed by the private educational lender, with certain exceptions.
- Borrowers may cancel a loan without penalty at anytime within three business days of the date the loan is consummated. Disbursement within the three business day cancellation window is prohibited.
Requires a private educational lender, on or before the date on which a private educational lender issues any funds with respect to a private education loan, to notify the relevant institution of higher education of the amount of the loan and the student on whose behalf the loan is made. Note - This provision is not in the law (updated 08/28/08).
Subtitle C - College Affordability
Section 1022. Application of Truth in Lending Act to All Private Education Loans
- Extends the provisions of TILA to all private education loans, regardless of the amount of such loans.
Section 1031. Community Reinvestment Act Credit for Low-Cost Loans
- Amends the Community Reinvestment Act to require the appropriate Federal financial supervisory agency to consider as a factor in assessing the financial institution's record of meeting the credit needs of its entire community (including low-and moderate-income neighborhoods, consistent with the safe and sound operation of such institution), low-cost education loans provided by the financial institution to low-income borrowers.
- Requires each Federal financial supervisory agency to issue final rules to implement the amendment no later than one year after the date of enactment of the Act.
Subtitle D - Financial Literacy; Studies and Report
Section 1041. Definitions
- Defines covered educational institution, private educational lender, private education loan, historically Black colleges and universities, and land-grant colleges and universities for purposes of this subtitle.
Section 1042. Coordinated Education Efforts
- Requires the Secretary of the Treasury, in coordination with the Secretary of Education, the Secretary of Agriculture, and appropriate member agencies of the Financial Literacy and Education Commission, to undertake efforts to enhance financial literacy among students at institutions of higher education.
- Not later than two years after the date of enactment, the Financial Literacy and Education Commission is required to submit a report to Congress on the state of financial literacy among students at institutions of higher education.
- The Secretary of the Treasury shall provide, upon request, testimony before the Senate Committee on Banking, Housing and Urban Affairs and the House Committee on Financial Services on the report required under this section
- Defines "covered educational institution," "historically Black colleges and universities" and "land-grant colleges and universities;"
TITLE XI - STUDIES AND REPORTS
This title mandates studies on the following topics:
- Section 1101. Study on Foreign Graduate Medical Schools.
- Section 1102. Employment of Postsecondary Education Graduates.
- Section 1103. Study on the feasibility of expanding IPEDS.
- Section 1104. Report and Study on Articulation Agreements.
- Section 1105. Report on Proprietary Institutions of Higher Education.
- Section 1106. Analysis of Federal Regulations on Institutions of Higher Education.
- Section 1107. Independent Evaluation of Distance Education Programs.
- Section 1108. Review of Costs and Benefits of Environmental, Health and Safety Standards.
- Section 1109. Study of Minority Male Academic Achievement.
- Section 1110. Study on Bias in Standardized Testing.
- Section 1111. Endowment Report.
- Section 1112. Study on Correctional Postsecondary Education.
- Section 1113. Study of Aid to Less-Than-Half-Time Students.
- Section 1114. Study on Regional Sensitivity in the Needs Analysis Formula.
- Section 1115. Study of the Impact of Student Loan Debt on Public Service.
- Section 1116. Study on Teaching Students with Reading Disabilities.
- Section 1117. Report on Income-Contingent Repayment Through the Income Tax Withholding System.
- Section 1118. Developing Additional Measures of Degree Completion.
- Section 1119. Study on the Financial and Compliance Audits of the Federal Student Loan Program.
- Section 1120. Summit on Sustainability.
- Section 1121: Nursing School Capacity
- Section 1122. Study and Report on Non-Individual Information.
- Section 1123. Feasibility Study for Student Loan Clearinghouse.
- Section 1124. Study on Department of Education Oversight of Incentive Compensation Ban