The National Association of Student Financial Aid Administrators Reauthorization of the Higher Education Act © 2014 NASFAA WFAA Conference 1 Reauthorization of Higher Education Act • Law mandates reauthorization every 5-7 years – Higher Education Opportunity Act passed in 2008 • Reauthorization should occur in 2014 – It won’t happen on time – The process has started, but there will not be a final bill • Predictions on timing – An automatic one-year extension will be granted at end of 2014 – Initial legislation has been released in both House and Senate, but markups are unlikely in this Congress – Election recess and a lame duck Congress will slow progress – Maybe start to see real movement in spring of 2015 © 2014 NASFAA 2 NASFAA’s Reauthorization Task Force • Began work in January 2012 • Consisted of 17 members from all sectors and regions • Forty listening sessions around the country © 2014 NASFAA 3 Total Comments Campus-Based Aid 2% Total Comments Need Analysis 24% Verification 5% Pell Grant 6% Miscellaneous 8% R2T4 9% Loans 23% Programs 7% © 2014 NASFAA 4 NASFAA’s Reauthorization Task Force • Developed 60 comprehensive recommendations approved by the NASFAA Board • Recommendations submitted to both the House and Senate Education Committees in the fall of 2013 • Document will continue to be updated, as the timetable for reauthorization is fluid © 2014 NASFAA 5 RTF Spin-off Task Forces Public Service Loan Forgiveness Task Force • Report released in July 2014 • Key recommendations to strengthen the PSLF program – Forgiveness limits: 100% up to $57,500 and 50% of remainder up to $138,500 total forgiveness – Keep untaxed – Increase awareness – Make data public © 2014 NASFAA 6 RTF Spin-off Task Forces Consumer Information Task Force • Report released in August 2014 • Key recommendations to improve consumer information – Eliminate annual notice and use College Navigator – Repeal student unit record ban – Examine usefulness of campus safety and fire safety reports, etc. – Eliminate non Title IV-related disclosures (e.g., Constitution Day, voter registration, etc. – Exempt graduate programs from inapplicable requirements – Require consumer testing for all new consumer information requirements © 2014 NASFAA 7 RTF Spin-off Task Forces Campus-Based Allocation Formula Task Force • Report released in August 2014 • Four recommendations to modify the campus-based aid allocation formula – Reconstruct income bands to more accurate reflect student need – Eliminate the base guarantee with phase-in protection – Restructure FSEOG fair share formula to be based on Pell funding received by institution with phase-in protection – Increase the assumed self-help for undergraduates in FWS and Perkins fair share formulas from 25% to 35% with phase-in protection © 2014 NASFAA 8 RTF Spin-off Task Forces Task forces starting work in fall 2014 • R2T4 • Competency-Based Education © 2014 NASFAA 9 Higher Education Affordability Act • Senate Democrats’ first draft of reauthorization bill • HEAA introduced on June 25th • Key provisions: – PPY – Year-round Pell – Eliminates student loan origination fees – Early notification of potential financial aid packages – Streamline repayment programs: a 10-yr plan, and an income-based plan – Borrowers more than 150 days delinquent auto-enrolled in IBR – Full school certification of private loans – Private student loans can be discharged in bankruptcy © 2014 NASFAA 10 Senators Alexander/ Bennet FAST Act • Financial Aid Simplification and Transparency (FAST) Act • Introduced on June 19th • Eliminates the FAFSA – Only asks for a student’s family size and adjusted gross income from two years prior • Implements a one grant/one loan system • Streamlines the repayment process into two programs: – A standard 10-year repayment and an income-based repayment • Introduces a “look-up” table that uses family size and PPY to find the Pell Grant award amount – Provides early information to students and families • Institutional authority to limit loans © 2014 NASFAA 11 House GOP Reauthorization • Released four bills: – Simplifying the Application for Student Aid Act – Empowering Students Through Enhanced Financial Counseling Act (Passed) – Strengthening Transparency in Higher Education Act (Passed) – Advancing Competency Based Education Demonstration Project Act (Passed) • These bills begin to address the committee’s four guiding principles: – – – – Empowering students and families to make informed decisions Simplifying and improving student aid Promoting innovation, access, and completion Ensuring strong accountability and a limited federal role © 2014 NASFAA 12 House GOP Reauthorization • Simplifying the Application for Student Aid Act – Mandates the use of PPY income in federal need analysis – Not yet marked up • Strengthening Transparency in Higher Education Act – Replaces College Navigator with a new site called College Dashboard – ED would maintain the site, and it would have institutional level information related to basic facts about an institution, such as: sector, web address, enrollment, completion, costs, financial aid, and cohort default rates – Passed the full House © 2014 NASFAA 13 House GOP Reauthorization Empowering Students Through Enhanced Financial Counseling Act • Replaces one-time entrance counseling requirement with annual counseling that must be completed before student accepts the loan • Passive confirmation of loans would no longer be allowed • Exit counseling is expanded to include borrower-specific information Calls for annual counseling of Pell recipients • ED required to offer consumer-tested, on-line counseling • Requires Parent PLUS counseling • Passed the full House © 2014 NASFAA 14 Other Reauthorization Marker Bills • What is a marker bill? – Legislation that gets introduced to promote an idea or set of ideas, but without the intent of immediate Congressional action • Recent marker bills: – Pell Grant Protection Act (Sen. Hirono) – Student Loan Borrower Bill of Rights (Sen. Durbin) – Bank on Students Emergency Loan Refinancing Act (Sen. Warren) – CHANCE Act (Sen. Landrieu) – Simplifying Financial Aid for Students Act (Sen. Booker) – College Affordability & Innovation Act (Sens. Murphy & Schatz) • It’s clear that Congress is interested in student aid issues © 2014 NASFAA 15 Other “Hot Topics” for Reauthorization • What is going to happen to the undergraduate interest subsidy? • What is going to happen to the Campus-Based Loan programs, including the Perkins Loan Program? • What will be done to address regulatory burden? © 2014 NASFAA 16 Questions? Email: policy@nasfaa.org © 2014 NASFAA 17 © 2014 NASFAA 18