Executive Director Update - December 7, 2017

House Republicans on Friday released a sweeping bill to reauthorize the Higher Education Act (HEA). The law, first enacted in 1965 and last reauthorized in 2008, governs federal higher education programs. Last week's proposal marks the first movement on reauthorizing the landmark legislation since the House passed a set of piecemeal measures several years ago.

The Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act would:

  • Overhaul federal student loans to a "one grant, one loan, one work-study" system
  • Streamline income-based repayment plans to one program, as well
  • Simplify the Free Application for Federal Student Aid (FAFSA)
  • codify the use of prior-prior year (PPY) income data for the FAFSA
  • Create a "consumer-tested, mobile-friendly" FAFSA
  • Eliminate loan origination fees
  • Provide a bonus to Pell Grant recipients to incentivize completion
  • Allow institutions the authority to limit borrowing
  • Maintain the ban on a federal unit-record system
  • Codify the Trump administration's interim guidance on Title IX and campus sexual assault
  • Tie Title III and Title V funds for minority-serving institutions to their ability to graduate or transfer 25 percent of their students
  • Eliminate the Public Service Loan Forgiveness program
  • Eliminate the Federal Supplemental Educational Opportunity Grant program
  • Eliminate the 90-10 rule that prevents for-profits from getting more than 90 percent of their total revenue from federal student aid programs
  • Repeal the "gainful employment" regulations that seek to cut off federal funding to career college programs that produce graduates with large debt loads and
  • Repeal the borrower's defense to repayment regulations that provide debt relief to defrauded student loan borrowers
  • Repeal the state authorization rule for distance education programs.

Beyond that, the legislation would actually prohibit any future Secretary of Education from promulgating any new regulations related to gainful employment, definition of a credit hour, or from creating an institutional ratings system—even though the Obama administration’s attempt to do so was unsuccessful.

The proposed measure would also replace the cohort default rate metric (CDR) with a program-level repayment rate metric. Programs with three-year repayment rates below 45 percent would lose access to federal student aid.

Short summary of the PROSPER Act

Full section-by-section summary of the PROSPER Act

Bill Text

While we believe the legislation includes some practical proposals, we are concerned that other provisions would negatively impact institutions, students, and college affordability.

On the Senate side, the chamber's education committee held a hearing last week to discuss proposals to simplify the Free Application for Federal Student Aid (FAFSA). Sen. Lamar Alexander (R-TN), chairman of the panel, announced that the committee's first order of business in the new year would be to mark up its own version of legislation to reauthorize the HEA. Both Democrats and Republicans in the Senate expressed their willingness to develop bipartisan legislation.

HEA Reauthorization has become an increasingly difficult task over the years. In the early years, lawmakers routinely renewed the act every four years. The most recent reauthorization, in 2008, was the first in 10 years. And the latest attempt will have taken at least that long by the time it is finalized, with each renewal more complex and complicated than the last. The now law governs the billions of dollars allocated to federal student aid programs, millions of dollars of institutional aid, as well as tackling issues related to accreditation, Title IX enforcement, and campus crime reporting, among many others.

As the reauthorization process moves forward, AACRAO will continue to closely monitor any developments and seek ways to work with Members of Congress, from both sides of the aisle, to ensure that important programs and policies that promote student and institutional success continue to be supported.

-Mike

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