It took five years, dozens of drafts, and a total of 14 extensions, but Congress last week was finally on the verge of passing a bill to renew the Higher Education Act, the major law governing federal student aid.
The bill, after approval by the U.S. House of Representatives, was headed to the Senate, where a final vote was planned for late last week. The measure was expected to pass and then go to President Bush for his signature.
Mr. Bush is expected to sign the long-overdue bill, which would be the most significant piece of higher-education legislation to clear Congress since September 2007, when lawmakers passed a measure that slashed subsidies to lenders in the government’s student-loan programs and used the savings to significantly increase federal student aid.
The 1,158-page bill, formally known as the Higher Education Opportunity Act (HR 4137), would set federal higher-education policy for the next five years, creating dozens of grant programs for colleges and students while imposing hundreds of new reporting requirements on institutions. It would crack down on conflicts of interest in the student-loan programs, press institutions and states to rein in tuition, and make it easier for for-profit colleges to become, or to remain, eligible to award federal student aid.
It includes provisions that seek to prevent students from taking out private loans unnecessarily, and it would expand eligibility for Academic Competitiveness and Smart Grants — which supplement Pell Grants for low-income, high-achieving students — to part-time students and those in certificate programs.
The bill would also prohibit the secretary of education from dictating how colleges measure student learning for purposes of accreditation and overhaul the department’s advisory committee on accreditation issues. However, it omits language in earlier versions that would have created a federal ombudsman’s position to resolve accreditation disputes.
Requirement for States
Before the House vote last week, members of a conference panel of negotiators from the House and Senate met to report the bill. They adopted an amendment by Rep. John F. Tierney, a Democrat from Massachusetts, that would punish states that fail to maintain their spending on higher education.
The “maintenance of effort” amendment would withhold federal College Access Challenge Grant funds from states that failed to raise spending on higher education each year by at least as much as they increased it, on average, over the previous five years. The challenge-grant program offers matching grants intended to increase the number of low-income students who are prepared to enter and succeed in postsecondary education.
Similar language by Representative Tierney was included in the House version of the legislation, but it was stripped from the compromise bill at the insistence of Sen. Lamar Alexander, a Republican from Tennessee who is also a former governor. As originally written, the provision would have withheld federal Leveraging Educational Assistance Partnership grants, which matches funds that states commit to need-based aid, rather than College Access Challenge Grant money.
During debate on the amendment, Mr. Alexander argued that the federal government has no business dictating how states spend their tax revenue, particularly when federal officials are not providing full funds for education for disabled students. To drive home his point, he offered an amendment that would prohibit the federal government from punishing states until it lived up to its end of the bargain by providing 40 percent of the average per-student cost for special education. The Senate conferees rejected that proposal, 10 to 11, then approved Mr. Tierney’s amendment, 12 to 9. The House conferees approved Mr. Tierney’s proposal by voice vote.
Public colleges, which have blamed rising tuition on state budget cuts, were delighted with the outcome.
“Policy makers have now accepted the premise that there is a direct correlation between public-college tuition and state appropriations,” said Edward M. Elmendorf, senior vice president for government relations at the American Association of State Colleges and Universities. “This Congressional action is one more step in working for a greater degree of stabilization in setting public-college tuition levels.”
But approval of Mr. Tierney’s amendment came as a disappointment to the National Governors Association, which had vigorously opposed it. In a written statement, Jodi Omear, the association’s senior press secretary, said the amendment would “ultimately increase the cost of college for students and families.”
“States will be unable to make major increases in good economic times because they will be penalized if they are unable to maintain spending in bad economic times,” she wrote.
A Mood of Celebration
For the most part, though, the mood at last week’s conference meeting was celebratory. Lawmakers have been working on the measure since 2003, and up until the week before the vote, it seemed doubtful that they would be able to complete work on a compromise bill before Congress’s August recess. If they had failed to do so, the bill could have become entangled in election-year politics and put off for another year.
The bill’s prospects improved late last month when lawmakers reached final agreement on a pair of provisions that had tied up negotiations for days. But the measure ran into another stumbling block early last week, when Sen. Tom Coburn, a Republican from Oklahoma who is nicknamed “Dr. No” by his colleagues, put a hold on the bill (among many others) to protest increased federal spending. He later agreed to lift his hold on the higher-education bill.
As senators prepared to vote on the compromise bill during the House-Senate conference meeting, Sen. Barbara A. Mikulski, a Democrat from Maryland, offered praise for her colleagues.
“Tonight we will make a difference in the lives of people,” said Senator Mikulski, who managed the debate in the absence of the ailing Sen. Edward M. Kennedy, the Massachusetts Democrat who is chairman of the Senate Education Committee.
Lobbyists for for-profit colleges are enthusiastic about the bill, which would make it easier for proprietary institutions to comply with a provision known as the “90-10 rule,” which requires them to receive at least 10 percent of their revenue from sources other than federal student aid. The bill would give for-profit institutions new ways to meet the 10-percent threshold and allow them to temporarily treat new federal-loan funds as part of their 10 percent.
Congress raised the limit on the amount students may borrow under federal loan programs by $2,000 per year last spring, largely in response to concerns that lenders’ departures from the federal loan programs and tightening credit criteria could make it harder for students to obtain private loans in the coming academic year.
For-profit colleges also welcomed a provision in the bill that would require colleges to disclose their transfer-of-credit policies. Lobbyists for for-profit institutions have long complained that some traditional colleges refuse to accept credits for courses completed at proprietary institutions simply because they are accredited by national organizations, rather than one of the six regional associations that accredit most nonprofit institutions.
“This is great news for students across America,” said Harris N. Miller, president of the Career College Association, after the bill was reported out of the conference committee. The bill, he added, “makes important, immediate, and long-overdue improvements to the higher-education system.”
The compromise bill also contains some good news for the Advisory Committee on Student Financial Assistance, which was created more than two decades ago to counsel Congress and the Education Department on student-aid issues. The House version of the bill would have abolished the influential committee, but the final version preserves it.
But lobbyists for traditional institutions are less enamored of the bill. While they appreciate the new grant programs and accreditation protections, many of them resent the increased federal oversight that the bill would bring. Under the legislation, colleges would be required to disclose a range of things as varied as their policies on illegal downloading of music and video files to the details of their preferred-lender lists and arrangements with lenders.
More Paperwork
Colleges say the bill’s new reporting requirements would increase their costs at the same time Congress is pressuring them to hold the line on tuition growth.
Under the bill, the secretary of education would publish annual lists of the institutions with the highest and lowest tuition, fees, and net prices, by sector, as well as lists of those with the largest percentage increases in net price and in tuition and fees over the previous three years. Institutions appearing on the percentage-based lists would be required to submit reports to the education secretary.
Still, nonprofit colleges can claim some victories. In the weeks leading up to last week’s conference, they persuaded lawmakers to drop language that would have required them to notify students and employees within 30 minutes of an emergency and to report any gift over $250,000 from a U.S. corporation (though lawmakers left in such a reporting requirement for gifts from foreign governments if the money was to be used for an international center receiving funds under the bill).
Colleges also persuaded lawmakers to abandon a requirement that institutions whose net tuition and fees outpaced their sector’s average submit reports to the secretary and provide the secretary with tax documents from the previous three years.
And while lawmakers retained a controversial requirement that colleges offer students music and video through subscription-based services, they provided a possible out, adding “to the extent practicable” to the bill’s language. Still, that language is considered a coup for the entertainment industry, which says illegal downloading on college campuses costs it millions of dollars. The bill also would require colleges to use technology to curtail copyright infringement on their campuses.
Lenders that market loans directly to consumers also scored a key victory in negotiations, persuading lawmakers to omit language from the House-passed bill that could have cut into their profits. The provision would have required lenders to obtain from colleges certification of borrowers’ enrollment status and information about the cost of attendance before issuing private loan money. It was designed to prevent students from taking out private loans before maxing out on federal loans. Student groups and consumer advocates had argued that it would give student-aid offices an opportunity to counsel their students to exhaust their federal eligibility first.
In a letter sent to members of Congress, the United States Student Association and the U.S. Public Interest Research Group called the change a “missed opportunity for Congress to increase student protection in the private-loan industry.”
But direct-to-consumer lenders, whose business could have suffered if colleges started warning students away from private loans, argued that the certification requirement could have reopened the door to some of the abuses uncovered in the recent student-loan scandal, like the practice of aid administrators’ steering students to preferred lenders.
In the end, House and Senate conferees agreed to replace the college-certification provision with a new requirement that students “self certify,” providing lenders with information about their costs of attendance and anticipated financial needs.
http://chronicle.com Section: Government & Politics Volume 54, Issue 48, Page A1
