Washington Policy Update

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Washington Policy Update

• Carol Graves Holladay

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Washington Update

• Commission on the Future of Higher Education
• FY08 Budget Requests
• Higher Education Reauthorization
• Impact of Elections

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Commission on the Future of Higher Education

• 19 Member Commission
• A series of public hearings
• Comprised of public officials and leaders from
  academics to business communities

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CommissionFindings

• College access, particularly for low-income and
  minority students, is limited by inadequate
  academic preparation, a lack of information and
  persistent financial barriers
• The current financial aid system is confusing,
  complex and inefficient, and is therefore
  frequently unable to direct aid to the students
  who need it most and
• There is a shortage of clear, comprehensive, and
  accessible information about the colleges and
  universities themselves, including comparative
  data about cost and performance.

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Commission Recommendations

• Student academic preparation should be improved
  and financial aid made available so that more
  students are able to access and afford a quality
  higher education.
• The entire student financial aid system should be
  simplified, restructured and provided with
  incentives to better manage costs and measure
  performance.

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Commission Recommendations, Cont.

• 3. A "robust culture of accountability and
  transparency" should be cultivated throughout the
  higher education system, aided by new systems of
  data measurement and a publicly available
  information database with comparable college
  information. There should also be a greater focus
  on student learning and development of a more
  outcome-focused accreditation system.

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CommissionRecommendations, Cont

• 4. Colleges and universities should embrace
  continuous innovation and quality improvement.
• 5. Federal investments should be targeted to
  areas critical to America's global
  competitiveness, such as math, science, and
  foreign languages.
• 6. A strategy for lifelong learning should be
  developed to increase awareness and understanding
  of the importance of a college education to every
  American's future.

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Spellings Action Plan

• Expanding the effective principles of No Child
  Left Behind to high schools, renewing a push by
  President Bush that Congress has thus far failed
  to carry out over two budget cycles. Spellings
  suggests that the higher education commissions
  work could give a new impetus to this drive by
  showing how many high school students graduate
  unprepared to do college level work.

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Spellings Action Plan

• Streamlining the process by which students apply
  for financial aid, to cut the application time
  in half and notify students of their aid
  eligibility earlier than spring of their senior
  year to help families plan to pay for college.
  Spellings said in an interview that the
  commissions broader recommendation about
  reviewing and streamlining the entire federal
  system of student financial aid (which she
  described as highly complicated, byzantine
  even") certainly requires Congressional action,
  and that she expected the Education Department to
  come up with a framework for such a review in the
  coming months.

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Spellings Action Plan

• Building a national framework that provides the
  same kind of privacy-protected student-level data
  we already have for K through 12 students, and
  using that data to create a higher education
  information system. Spellings avoided using the
  loaded phrase unit records system to describe
  this project, which has been vigorously opposed
  by private colleges and leading Republicans in
  Congress, but her speech aims to ward off the
  objections theyve raised about possible invasion
  of students privacy. This information would be
  closely protected it would not identify
  individual students, nor be tied to personal
  information it wouldnt enable you to go online
  and find out how Margaret Spellings did in her
  political science classes.

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Spellings Action Plan

• Providing matching funds to colleges,
  universities and states that collect and publicly
  report student learning outcomes. No additional
  details provided about this plan.
• Convening accreditors and other higher education
  leaders and policy makers to help prod the
  countrys college accreditation system away from
  its emphasis on inputs toward measures that
  place more emphasis on learning. Currently,
  institutions are asked Are you measuring student
  learning? and they check yes or no. That must
  change. Whether students are learning is not a
  yes or no question its how? How much? And to
  what effect?

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Next Steps-What we know

• Staff hired to write legislation
• Legislation will be presented in next Congress
• Support for the measures
• D of ED staffing issues

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FY 08 Budget Requests

• Pell Grant and other Fin Aid Programs Increase
• Increase Pell Grant to cover 70 of the ave. in
  state tuition
• Increase SEOG, Work Study, Perkins Loans, LEAP,
  TRIO and GEAR UP

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FY 08 Budget Requests

• International Education
• National Security Language Initiative
• Abraham Lincoln Study Abroad Program
• American Competitiveness Initiative (research)
• NIH
• Workforce Development Perkins
• NASA Science
• National Endowments for the Humanities

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Higher Education Reauthorization

• Title IV in Budget Reconciliation Package
• New Congress in February means new legislation
• If change in Congressional Control, complete
  reshift of focus for bill.

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Title IV Deficit Reduction Act

• The Deficit Reduction Act covered all Title IV
  provisions from the Higher Ed Reauthorization
  bill and was passed on February 6, 2006.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8002) Eliminates the 50 rule with respect
  to distance education, where it currently limits
  the relative number of courses an institution of
  higher education (IHE) may offer by
  telecommunications, and the relative number of
  students who may be enrolled in such courses, for
  purposes of student assistance program
  eligibility. (Continues application of the 50
  rule to correspondence courses.)

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DRA Subtitle A Higher Education Provisions

• (Sec. 8003) Establishes a program of (1)
  academic competitiveness grants for first and
  second year undergraduate students and (2)
  national science and mathematics access to retain
  talent (SMART) grants for third and fourth year
  undergraduate students of physical, life, or
  computer sciences, mathematics, technology,
  engineering, or critical foreign languages.
  Establishes the Academic Competitiveness Council.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8004) Reauthorizes the Federal Family
  Education Loan (FFEL) program. Extends authority
  for federal insurance on student loans, and for
  the guaranteed loan and consolidated loan
  programs. Refers to loan processing and issuance
  fees rather than an administrative cost
  allowance.
• (Sec. 8005) Increases loan limits.
• (Sec. 8006) Increases PLUS loan interest rates.
  Establishes a special allowance support level to
  be used in a formula for calculating excess
  interest to be recaptured by the Treasury.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8007) Provides for student loan deferments
  of up to three years for individuals serving on
  active duty or performing National Guard duty
  during a war or other military operation or
  emergency.
• (Sec. 8008) Revises loan terms and conditions
  relating to (1) disbursement to students
  studying abroad and (2) repayment plans for
  direct loans.
• Provides for gradual reduction of loan
  origination fees paid by student borrowers under
  the FFEL program.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8009) Revises consolidation loan
  requirements.
• Requires the Secretary of Education (the
  Secretary, under this title) to offer direct
  consolidation loans to eligible borrowers who
  have been denied consolidation loans or
  consolidation loans with income-sensitive
  repayment terms by an eligible lender.
• Eliminates in-school consolidation loans.
  Provides for similar terms and conditions for
  FFEL consolidation loans and DL consolidations
  loans.
• (Sec. 8010) Revises requirements for
  disbursements of student loans.
• (Sec. 8011) Revises requirements for IHEs as
  lenders.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8013) Continues certain limitations on
  special allowance payments under HEA, as amended
  by the Taxpayer-Teacher Protection Act of 2004
  (TTPA), by eliminating specified TTPA termination
  dates. Prescribes an additional limitation on
  special allowance payments for loans from
  proceeds of tax-expt issues.
• Continues TTPA authorization of increased maximum
  amount, new borrower eligibility, for HEA's
  loan forgiveness program for school teachers who
  teach certain subjects in high-poverty
  schools-sets guidelines for private school
  teachers to qualify for forgiveness program.
• (Sec. 8014) Establishes a limited federal default
  fee. Revises administrative requirements for (1)
  insurance percentage (2) treatment of exempt
  claims (3) consolidation of defaulted loans (4)
  documentation of forbearance agreements (5)
  voluntary flexible agreements (6) the default
  reduction program (7) exceptional performance
  insurance rate and (8) uniform administrative
  and claims procedure.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8015) Provides for mandatory funds for
  FY2006 to be available to the Secretary in a
  specified limited amount for (1) administrative
  costs under the DL and FFEL student loan
  programs and (2) account maintenance fees
  payable to guaranty agencies under FFEL.
• Authorizes appropriations, but eliminates
  mandatory funding, for such administrative
  expenses in FY2007-FY2011.
• Continues mandatory funding for FY2007-FY2011 for
  account maintenance fees payable to guaranty
  agencies under FFEL. Limits such fees to not more
  than 0.1 of the original principal amount of
  outstanding loans on which insurance was issued
  under FFEL.
• (Sec. 8016) Revises cost of attendance and family
  contribution requirements.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8018) Revises guidelines for determining a
  student's eligibility for the simplified needs
  test (SNT) and automatic-zero expected family
  contribution (AZ-EFC).
• (Sec. 8019) Revises need analysis requirements to
  treat active duty members of the military as
  independent students.
• Exempts from consideration assets from any small
  business with 100 or fewer full-time or full-time
  equivalent employees that is owned or controlled
  by the family.
• Excludes consideration of certain assistance
  provided by a state to offset a specific
  component of the cost of attendance, under
  specified conditions.

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DRA Subtitle A Higher Education Provisions

• (Sec. 8020) Makes eligible for student assistance
  distance education, including certain
  instructional programs that use or recognize
  direct assessment of student learning in place of
  credit hours or clock hours as the measure of
  student learning.
• (Sec. 8020) Makes eligible for student assistance
  distance education, including certain
  instructional programs that use or recognize
  direct assessment of student learning in place of
  credit hours or clock hours as the measure of
  student learning.
• (Sec. 8021) Requires any student who has pled
  guilty or no contest to (or been convicted of) a
  crime involving fraud in obtaining title IV funds
  to repay the funds in full to the Secretary or
  loan holder before being considered eligible
  again.

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DRA Subtitle A Higher Education Provisions

• Specifies that a conviction for a drug-related
  offense affects a student's title IV eligibility
  only if it occurs during the period when the
  student is enrolled and receiving title IV
  student aid.
• (Sec. 8022) Revises requirements relating to
  institutional refunds.
• (Sec. 8023) Establishes a college access
  initiative. Directs the Secretary to require each
  guaranty agency to gather information on programs
  and student aid available in the state in which
  it is designated. Requires such information to be
  made available for free to the public,
  particularly to traditionally underrepresented
  populations, via web sites, publications, and
  other state services.
• (Sec. 8023) Increases, from 10 to 15, the
  maximum portion of disposable wages for any pay
  period which may be garnished to repay a student
  loan under HEA (unless the individual consents to
  a greater portion).

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Elections

• Possible Switch in House means
• Need 15 pick ups 35 in play
• Chairman George Miller (D-CA)
• Dale Kildee, Vice Chair (D-MI)
• Possible Switch in Senate means
• Need 6 pick ups
• Chairman Ted Kennedy
• Chris Dodd, Vice Chair (D-CT)

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Elections - Statehouses

• Broadening gap of the belief in state funding
  higher education and the decrease of state
  funding
• (basic public right vs. limits to what the state
  can provide)
• 36 Statehouses are up for grabs 28 of 50 are
  now in Republican control
• States are becoming more purple will lead to
  gridlock

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Elections - Statehouses

• 2 Major Issues
• College affordability
• Need based Aid
• Overarching Issues
• Community College Support
• Brain Drain
• K-20 Councils
• Credit Transfer

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Elections

• Impact on Higher Education Reauthorization
• House will roll back all legislation
• Senate will rewrite legislation slated to be
  passed in March/April
• Appropriations (discretionary spending)
• Rollback of provisions of Deficit Reduction Act

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Elections

• Timetables
• Committee realignment February/March
• Legislative work first 100 days
• Accomplishments
• Appropriations Schedule

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New Issues

• Student Loan Interest Rate Cut
• Pell Grant increase
• Oversight and Investigations
• NCLB roll back

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Carol Graves Holladay

• Hurt, Norton and Associates
• 503 Capitol Court, NE Suite 200
• Washington, DC 20002
• 202-543-9398
• Carolholladay_at_hurtnorton.com