House Moves First Three HEA Reauthorization Bills

July 11, 2014 · by mlivolsi · Spark Notes
July 11, 2014
Prepared by:  Harrison Wadsworth  (hwadsworth@wpllc.net) 
 
The House Education and Workforce Committee yesterday approved three parts of the Higher Education Act reauthorization legislation, all passing with bi-partisan support after an apparently collegial process took place in writing them.  The three were not really controversial, with the hard parts – including the student aid programs — left for future bills that are still in development and are far more likely to be partisan.  This was reflected in Democrats’ unsuccessful attempts to amend the bills on the table yesterday with their election year priorities – student loan refinancing and slaps at for-profit schools.
 
Committee Chairman John Kline (R-MN) has undertaken a piecemeal strategy for reauthorization, following a script used on other areas by House Republicans, with the easier parts brought up first in order to set up a practice of working together with Democrats on legislation that he hopes may spill over into the harder parts.  There is precedent for bi-partisan HEA reauthorizations, with the last two passing almost unanimously.  But the partisan divide was illustrated in the choreographed offering of amendments to each bill by Democrats as well as complaints that the majority has been too slow in bringing up comprehensive legislation that does something about college costs and student debt.
 
Bills to come later will deal with regulatory relief and revising the student aid programs to simplify them.  In a position paper released earlier, House Republicans said they support a one grant, one loan system, rather than multiple types of loans and grants.  Senators Lamar Alexander (R-TN) and Michael Bennet (D-CO) released draft legislation along these lines two weeks ago, the FAST Act, which includes elimination of Graduate PLUS loans in favor of one undergraduate student loan with higher annual loan limits than presently offered by Stafford Loans, one graduate student loan with annual and cumulative limits, and one loan for parents, Parent PLUS.
 
Although House Republicans may bring up at least some of the bills passed yesterday on the House floor later this year, HEA reauthorization won’t be passed this year.  Senate Democrats apparently hope to have a markup of a more comprehensive reauthorization bill in September, since they have asked for comments on their “discussion draft” legislation by August 28th.  That bill is not bi-partisan at this point and contains provisions that Republicans have opposed, so it’s prospects for passage are dim this year.None of the bills so far introduced change current law on Perkins Loans.  The one-loan approach could signal elimination of Perkins, but the fact that the Perkins Loan Program is one of the three campus-based programs and thus serves is part of their special, supplemental, functions sets it apart.  Rep. Tim Bishop (D-NY) made a point at the House markup to express strong support for continuing the Perkins Loan Program.  The future of Perkins remains to be determined at a later date as the various reauthorization bills are worked on in the next Congress.

The bills that passed, all by voice vote, are:

  • H.R. 4983, Strengthening Transparency in Higher Education Act. by Higher Education and Workforce Training Subcommittee Chairwoman Virginia Foxx (R-NC) and Rep. Luke Messer (R-IN) will help students gain access to the facts they need to make an informed decision about their education.
  • H.R. Empowering Students through Enhanced Financial Counseling Act. Introduced by Reps. Brett Guthrie (R-KY) and Richard Hudson (R-NC), H.R. 4984 will promote financial literacy through enhanced counseling for all recipients of federal financial aid. To learn more about the legislation, click here.
  • H.R. 3136, Advancing Competency-Based Education Demonstration Project Act, by Reps. Matt Salmon (R-AZ), Gerald Polis (D-CO) and Susan Brooks (R-IN), would experiment with allowing federal student aid to go to education programs that include direct assessment of higher educational progress instead of purely time-based measurements.

H.R. 3136 was brought up instead of a bill originally announced by the Committee for the markup: the “Simplifying the Application for Student Aid Act,” which would “reform the federal student aid process to help students make timely financial decisions about their education” — FAFSA simplification in other words.  That measure which also had bi-partisan sponsorship is likely to come up in the next round of markups.

H.R. 4984 requires that Direct Loan borrowers be told that federal student loans generally offer better terms and conditions than private student loans.  An earlier version of the bill said that prospective borrowers should be issued a “warning” about private loans.  The word “warning” was removed from the amended version that passed yesterday, although the requirement for another layer of disclosures remains along with a recommendation that borrowers exhaust their federal loan eligibility before borrowing private loans.

H.R. 4983 would replace the current lists of college prices and the lists of top price increasers and decreasers with a dashboard prepared by the Education Department that lists data for each institution.  The dashboard will include a long list of information including average loan debt and costs for each type of institution.  Rep. George Miller (D-CA), the ranking Democrat on the Committee, offered an amendment to add student loan repayment rates to the list of disclosures.  Kline opposed that, saying enough information would already be included and that statistic might be confusing to potential students.  The amendment was defeated in a party line vote.

Rep. John Tierney offered an amendment to H.R. 3136 that consisted of many of the provisions of legislation he previously introduced, and that Sen. Elizabeth Warren (D-MA) introduced in the Senate, to permit current student loan borrowers to refinance their loans at the lower interest rates available for 2013-14.  The government cost of that proposal would be offset by an increase in taxes on those making more than $1 million a year.  However, Kline ruled that the amendment was not germane to H.R. 3136 and an appeal of that ruling failed on party lines.  The amendment gave Democrats a chance to call for more comprehensive reauthorization legislation that would include student debt relief.  Kline noted that he supported the legislation passed in 2013 that reduced interest rates on new federal Direct Loans.

Reps. Susan Davis (D-CA) and Mark Pocan (D-WI) offered an amendment to H.R. 4983 that would have changed the “90-10 rule” to treat federal education assistance to veterans and members of the military the same as student aid funds provided under the Higher Education Act.  Currently, at least 10 percent of revenues received by for-profit schools must come from sources other than HEA-authorized student aid funds.  GI Bill and active duty tuition assistance benefits count towards the 10 percent requirement, a situation that the amendment would have reversed.  The amendment was ruled out of order by Kline for being beyond the scope of the bill, which narrowly focuses on counseling, and an appeal of the ruling failed along party lines. 

A recording of the hearing, along with the text of the bills as approved by the Committee, is available here: http://edworkforce.house.gov/calendar/list.aspx?EventTypeID=190

 

 

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