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.

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.


  • 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.




Federal Watchdog Weighs in on Online Program Managers

May 12, 2022, 13:24 PM
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Summary : Education Dept. needs to strengthen its approach to monitoring college's arrangements with third-party OPMs, Government Accountability Office report finds.
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The U.S Education Department needs to strengthen its approach to monitoring college's arrangements with third-party online program managers (OPMs), according to a new report from the Government Accountability Office (GAO).

The report, released late last week, found that nearly three-quarters of the nation's college students were enrolled in an education program offered at least partially online in 2020. Some colleges have contracted with OPMs to help them deliver programs online and recruit students for these programs. Many such online managers receive a portion of generated program revenue in return for those services, making these arrangements subject to the department's oversight and the Higher Education Act's ban on incentive compensation to prevent abusive recruiting practices. 

However, GAO's report, which was initially requested by Sen. Patty Murray (D-WA), found that the Education Department's monitoring instructions for annual audits and agency reviews fail to ensure that it obtains information about colleges' OPM arrangements to fully assess compliance with the incentive compensation ban. The agency, in fact, does not even know how many college OPM contracts exist, The Chronicle of Higher Education reported.

The report makes two key recommendations, with which the department agreed and described plans to address: 

  • The Secretary of Education should provide additional instructions that prompt auditors to ask specifically about OPMs, direct auditors to obtain and assess compensation information for OPM staff who provide recruiting services, and reference relevant guidance including the 2011 Dear Colleague Letter, which originally outlined the stipulations for OPM revenue sharing arrangements.
  • The Secretary of Education should provide additional instructions to colleges regarding the information they must provide about their OPM arrangements during compliance audits and program reviews and explaining that colleges are responsible for both identifying all OPM contracts that include recruiting, and then providing auditors and Education's program review staff with copies of those contracts and information on how covered OPM staff are compensated. 

"Without clearer instructions to auditors and colleges about the information on OPM arrangements that must be assessed during compliance audits and agency reviews, there is a risk that Education will not have the information it needs to detect incentive compensation violations," the GAO report states.

"With so many for-profit companies helping run—and recruit students for—colleges' online education programs, we must make sure students are protected," said Sen. Murray, Inside Higher Ed reported. "This report makes clear the Biden administration needs to conduct proper oversight to protect students, prevent abusive recruiting practices and improve transparency of these business arrangements—and I'm glad they are committed to taking action."

Related Links

U.S. Government Accountability Office Report


The Chronicle of Higher Education


Inside Higher Ed


Michelle Mott
Categories :
  • Admissions and Recruitment
  • Advocacy
  • Compliance and Reporting
  • Higher Education Act
  • Online and Distance Learning
Tags :
  • accountability
  • education department
  • Federal relations
  • incentive compensation
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