aacrao-logo_transparent

Higher Education Act

The Higher Education Act (HEA) is a federal law that governs the administration of federal higher education programs. Its purpose is to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.

First passed in 1965 to ensure that every individual has access to higher education, regardless of income or zip code, the HEA governs student-aid programs, federal aid to colleges, and oversight of teacher preparation programs. It is generally scheduled for reauthorization by Congress every five years to encourage growth and change.

The HEA has been reauthorized in 1968, 1972, 1976, 1980, 1986, 1992, 1998, and 2008. Current authorization for the programs in the Higher Education Act expired at the end of 2013, but has been extended while Congress prepares changes and amendments.
Capitol

Latest Actions

Efforts to update the Higher Education Act stalled as the COVID-19 pandemic put Congressional discussions on hold. Prior to the outbreak, lawmakers were reportedly close to reaching a deal after years of failure. However, there is hope that negotiations will eventually resume in the 117th Congress.

HEA in the 116th Congress

  • Senate Action

    U.S. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) in September 2019 introduced a piecemeal approach to update the Higher Education Act in the 116th Congress (2019-2020). The Student Aid Improvement Act, S. 2557, included eight bipartisan bills to streamline the Federal Application for Student Aid (FAFSA), simplify financial aid award letters, expand Pell Grant eligibility for students in prisons and allow Pell to be used for short-term programs, among other changes. The proposal followed months of stalled efforts to reach a bipartisan deal for a comprehensive HEA reauthorization.

    SENATE PRESS RELEASE   BILL TEXT

  • House Action

    Democrats on the U.S. House Education and Labor Committee in October 2019 unveiled a sweeping overhaul of the federal higher education law, aiming to cut the cost of college and increase access to college for low-income and minority students. The College Affordability Act included provisions that would:

    • Include the Reverse Transfer Efficiency Act, which AACRAO strongly supports and has advocated for over the past several years
    • Create a national tuition-free community college through a federal-state partnership model where the federal government contributes a per student amount at least 75 percent of the average resident tuition for public community colleges and states contribute 25 percent
    • Increase the maximum Pell Grant award by $500 and permanently index the award to inflation
    • Simplify FAFSA, including an automatic zero EFC for recipients of means-tested benefits
    • Create the Federal Direct Perkins Loan Program to provide an additional source of borrowing for undergraduates and graduates
    • Allow Deferred Action for Childhood Arrivals (DACA) and certain other undocumented students access to federal student aid
    • Repeal the federal "student unit record" ban and require the Education Department to develop a system that uses student-level data to evaluate postsecondary outcomes
    • Change the 90/10 rule ratio (the percentage cap of Title IV aid an institution may receive) to 85/15 and expand it to include all educational programs
    • Require the Education Department to establish a Borrower Defense to Repayment process to discharge the federal loans of students who were defrauded by their colleges
    • Require the Education Department to establish a compliance standard that includes a debt-to-earnings threshold for training programs that are statutorily required to lead to gainful employment
    • Prohibit the Education Department from issuing or enforcing the proposed Title IX rules that the Trump administration published in November 2018, among other things.
     

    The College Affordability Act shared some key provisions with the Senate's package of bipartisan bills. Both proposals aimed to streamline FAFSA, simplify financial aid award letters, and expand Pell eligibility for incarcerated students and short-term programs—although the House bill excluded for-profit colleges.

    However, the House measure did not gain any traction in the 116th Congress's Republican-controlled Senate.

    HOUSE PRESS RELEASE BILL TEXT OVERVIEW OF COLLEGE AFFORDABILITY ACT

     

UPDATES

AACRAO, Higher Ed Groups Call for Overhaul of Financial Aid System

Feb 16, 2023, 12:37 PM
legacy id :
Summary : Associations comment on the Biden administration's income-driven repayment proposal, expressing appreciation for "important and long overdue corrections." But also push for a more comprehensive reworking of the federal financial aid system.
Url :

AACRAO and 29 other higher education associations recently submitted comments on the U.S. Education Department's proposed overhaul of income-driven repayment (IDR) programs.

The agency received nearly 13,000 comments on its draft regulations governing IDR, Inside Higher Ed reported. The proposed changes, unveiled in January, aim to reduce the cost of federal student loan payments, especially for low and middle-income borrowers, according to a press release. The proposed regulations would amend the terms of the Revised Pay As You Earn (REPAYE) plan to offer $0 monthly payments for any individual borrower who makes less than roughly $30,600 annually and any borrower in a family of four who makes less than about $62,400. Currently, borrowers making $20,400 or less are not required to repay.

The regulations would also cut in half monthly payments on undergraduate loans for borrowers who do not otherwise have a $0 payment in this plan, with a cap of 5 percent on a borrower's discretionary income—down from the 10 percent currently available under most plans. The proposal would also raise the amount of income that is considered non-discretionary and protected from repayment; forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less; and fully cover a borrower's unpaid monthly interest.

AACRAO and other groups expressed appreciation for making "important and long overdue corrections" to the student loan repayment system in its proposal and providing "significantly more generous repayment and forgiveness terms." The proposed changes contain a number of recommendations offered by the higher education community in recent years.

However, the associations also noted that the "piecemeal" approach that the Education Department believes it must take in the absence of any congressional action falls short of a much-needed comprehensive reworking of the federal financial aid system. The groups called for a "comprehensive effort to review the entirety of our lending and repayment system, along with a complete reauthorization of the Higher Education Act," in their comments to the department. "This would be the most effective way to address problems with loan repayment policies in a holistic way."

"We will remain supportive of ways to ease the repayment burden on students and hope to see a solution that will allow for more consistency across repayment plans for all borrowers," the associations wrote.

The department will review the comments before releasing the final regulations. The Biden administration wants to start the new program this year, Inside Higher Ed reported.

Related Links

U.S. Education Department Press Release

https://www.ed.gov/news/press-releases/new-proposed-regulations-would-transform-income-driven-repayment-cutting-undergraduate-loan-payments-half-and-preventing-unpaid-interest-accumulation

Comments on Draft Overhaul of Income-Driven Repayment

https://www.aacrao.org/docs/default-source/statements-and-letters/comments-ed-idr-nprm-021023.pdf 

Inside Higher Ed

https://www.insidehighered.com/news/2023/02/13/income-driven-repayment-overhaul-step-forward 


Michelle Mott
Categories :
  • Advocacy
  • Financial Aid and FAFSA
  • Higher Education Act
Tags :
  • Debt
  • education department
  • Federal Regulations
  • Federal relations
  • forgiveness
  • IBR
  • interest
  • REPAYE
  • student loans
Related people