Yesterday various members of the House Education and the Workforce Committee introduced a new bill to make the Pell Grant more flexible and reintroduced three bills introduced in the last Congress related to higher education affordability and transparency. The reintroduced bills address the use of prior-prior year income (PPY) in need analysis, counseling for students, and transparency for students and families.
The “Simplifying the Application for Student Aid Act” (H.R. 3177), introduced by Reps. Denny Heck (D-WA), Phil Roe (R-TN), Jared Polis (D-CO) and Mark Pocan (D-WI), would require the Department of Education (ED) to use PPY in the federal need analysis. NASFAA has advocated for this change to the basis of the expected family contribution (EFC) calculation as part of its reauthorization recommendations. The use of PPY would offer more time for students and families to evaluate award offers from institutions and make an informed decision about where to attend college, and could also enhance use of the Internal Revenue Service’s Data Retrieval Tool (IRS-DRT). This tool simplifies the application process and decreases the burden of income verification. Research on PPY conducted by NASFAA shows that dependent students from very low-income families and independent students with dependents of their own (two of the neediest cohorts) could benefit from a switch to PPY. NASFAA has also conducted research discussing implementation issues associated with PPY.
The “Empowering Students Through Enhanced Financial Counseling Act” (H.R. 3179), introduced by Reps. Brett Guthrie (R-KY), Rick Allen (R-GA), and Suzanne Bonamici (D-OR), would implement new requirements designed to ensure that students make informed decisions when accepting federal loans and Pell Grants.
The bill would change the current one-time entrance counseling requirement for student loans into an annual counseling requirement that must be completed before the student accepts the loan. Passive confirmation of a subsequent loan would no longer be permitted. That is, students must, annually, actively accept every loan by either signing a Master Promissory Note or signing a statement accepting the loan.
The required content of exit counseling would be expanded to include more borrower-specific information, including:
The bill also calls for annual counseling for Pell Grant recipients (regardless of whether they are also borrowing a loan) prior to the first disbursement of a Pell Grant in an award year. The counseling must include explanations of:
ED would be required to develop consumer-tested, online counseling tools that meet statutory requirements.
The “Strengthening Transparency in Higher Education Act” (H.R. 3178), introduced by Reps. Virginia Foxx (R-NC), Luke Messer (R-IN) and Gregorio Sablan (D-Northern Mariana Islands), would eliminate the College Navigator and its associated affordability and transparency lists and state higher education charts released by ED. In its place would be a College Dashboard Website, which would be developed and maintained by ED. The Dashboard would include institutional-level information related to:
The legislation would also mandate ED to include a method for users of the Dashboard to easily compare institutions.
The “Flexible Pell Grant for 21st Century Students Act” (H.R. 3180), introduced by Reps. Elise Stefanik (R-NY), Carlos Curbelo (R-FL), and Ruben Hinojosa (D-TX), would permit students to receive additional Federal Pell Grant during an award year beginning on or after July 1, 2017, in order to accelerate their progress towards their program credential. Under this bill, a student could receive up to 150% of his or her Scheduled Award during an award year.
“Accelerate” would mean that the total number of credits (or equivalent) earned during the previous payment periods in the award year plus the credits in which the student enrolls during the additional payment period together exceed the number of credits in the institution’s definition of academic year for the student’s program of study. The student would be able to make up deficient credits from the prior payment periods while at the same time taking credits beyond the academic year definition.
For example, if the academic year is defined as including 30 credits, a student who earned a total of 27 credits in the fall and spring of a semester-based program could enroll in six credits in summer; three would complete the first academic year and three would qualify the student as accelerating. This student would be paid for six credits. The payment would consist of any leftover funds from the first scheduled award (for example, the student might have attended, and been paid, on a three-quarter-time basis for one of the terms) plus whatever amount is necessary from a second award to make up the student’s full eligibility for the extra term.
If this sounds familiar, it is very like the previous incarnation of year-round Pell in 2010 and 2011, but, importantly, without the added complexity of mandatory assignment of cross-over periods. NASFAA worked at length with Hill staff to ensure that, as the bill states, the institution has discretion for assigning any cross-over period to an award year; this provision should prevent much of the confusion and burden associated with the former rules. It also allows a waiver of the acceleration requirement for a student who could not accrue the requisite number of credits due to circumstances beyond the student’s control.
Any additional Pell payment would count towards the student’s overall lifetime eligibility, and the school would have to notify the student of that fact. The institution could also offer additional counseling to the student as long as it did not impede or delay disbursement. Students would be permitted to decline the extra Pell award within a reasonable timeframe established by the institution. The bill would also require ED to explain information about remaining eligibility to the student in an annual status report and to provide a calculator that the student may use to determine remaining eligibility.
It is unlikely that these bills will see any immediate movement as Congress will recess for the month of August. It is possible that reauthorization will see some additional movement later this fall.
Publication Date: 7/24/2015