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.




House Dems Unveil Alternative HEA Reauthorization Bill

Jul 25, 2018, 15:54 PM
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Summary : The Democratic alternative proposes free community college, expansion of student aid programs, and tougher accountability measures.
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House Democrats on Tuesday unveiled their version of legislation to reauthorization the Higher Education Act, as the Republican-backed Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act, H.R. 4508, has struggled to reach the House floor.

The legislation, introduced by Democrats on the House education committee, incorporates a package of smaller bills from a legislative campaign started last year, which focused on making college more affordable, reported Bloomberg Government. The Aim Higher Act, named after that initiative, includes provisions that would require states to make public two-year college free for every student, offer students the option of debt-free in-state college, and allow incarcerated and undocumented students to access federal student aid.

The bill would boost the maximum Pell Grant by $500 and index the value of the grant in future years to inflation. Additionally, it would shift the majority of Pell funds to mandatory spending, making support for the program more stable.

Aim Higher would modernize the funding formula for Supplemental Educational Opportunity Grants (SEOG) to better direct the program to institutions with the most unmet need. It would also protect and expand the Public Service Loan Forgiveness (PSLF) program, which forgives public servants' loan debt after 10 years of repayment.

The PROSPER Act, in contrast, would cut borrower benefits—including eliminating both the SEOG and PSLF programs and the student loan in-school interest subsidy—and keep the maximum Pell Grant steady at its historic low rate of purchasing power.

The Democrats' bill would take a dramatically different approach to accountability as well, preserving key rules targeting for-profit colleges eliminated in the PROSPER Act, in some cases pushing them further, reported Inside Higher Ed. For example, the Republican plan would eliminate the so-called 90-10 rule, which limits the proportion of revenue an institution can generate from federal student aid to 90 percent. Under Aim Higher, the rule would not only be maintained, but would be changed to an 85-15 formula.

Aim Higher would maintain the cohort default rate, an accountability rule that applies to all higher education institutions, by adjusting the metric for total number of borrowers at an institution and number of borrowers in long-term forbearance. It would also alter the role of accreditors by requiring the oversight bodies to account for student outcomes like completion and workforce participation in their evaluations of colleges.

The Democratic proposal does share some common features with the PROSPER Act, Inside Higher Ed reported. Like the Republican bill, it would streamline loan repayment options by offering one fixed rate and one income-driven repayment plan for student borrowers. It would eliminate student loan origination fees and open Pell Grant eligibility to short-term programs. Additionally, the legislation includes language, championed by AACRAO, from the bi-partisan Reverse Transfer Efficiency Act that would create a new FERPA exemption to allow the sharing of student information between institutions to facilitate increased college completion rates through reverse transfer.

Neither the Aim Higher Act nor the PROSPER Act are likely to become law, especially in an election year with many higher legislative priorities. However, both bills serve as a marker for House Democrats' and Republicans' efforts to overhaul higher education policy as the reauthorization process slowly moves forward.

Related Links

Aim Higher Act Fact Sheet


Bloomberg Government


Inside Higher Ed


Michelle Mott
Categories :
  • Accreditation
  • Advocacy
  • Financial Aid and FAFSA
  • Higher Education Act
  • Reverse Transfer
Tags :
  • 90/10 rule
  • Federal relations
  • pell grant
  • Public Service Loan Forgiveness program
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