House And Senate Release Several Proposals As HEA Reauthorization Nears

 Reauthorization - Masthead  

There has been a frenzy of activity on Capitol Hill in recent weeks as Congress gears up for the reauthorization of the Higher Education Act (HEA). Below you will find summaries of the most recent proposals that have been put forward – stay tuned to Today’s News for more information as it becomes available.

Financial Aid Simplification and Transparency (FAST) Act  

Introduced by Sens. Lamar Alexander (R-TN) and Michael Bennet (D-CO) on June 19, the FAST Act would mandate the use of prior-prior year (PPY) income in the calculation of expected family contribution (EFC), reinstate year-round Pell Grants, and allow financial aid administrators more authority to limit loan amounts for certain academic programs-- all measures for which NASFAA has shown support. The bill would also prohibit part-time students from taking out loans at the full-time amount.

The FAST Act would eliminate the FAFSA, replacing the application process with a postcard that would ask only for a student’s family size and adjusted gross income from two years prior. Other provisions include: 

  • Implementing a one grant/one loan system;
  • Streamlining the repayment process into two programs – a standard 10-year repayment and an income-based repayment; and
  • Introducing a “look-up” table that uses family size and PPY to find the Pell Grant award amount, thereby providing early information to students and families.

Higher Education Affordability Act (HEAA)

Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-IA) on June 25 introduced the HEAA, which includes several provisions NASFAA supports, such as:

  • PPY;
  • Year-round Pell;
  • The elimination of student loan origination fees;
  • Full certification of private loans; and
  • Early notification of potential financial aid packages.

The bill also would allow private student loans to be discharged in bankruptcy. Private loans and U.S. Department of Health and Human Services (HHS) loans would be included in the National Student Loan Data System (NSLDS). Repayment plans would be streamlined into one Income-Based Repayment (IBR) program with a continued option for 10-year repayment. Borrowers 150 days delinquent in their repayment would be auto-enrolled in IBR.

Other provisions include the development of a complaint tracking system, a mandate for standardized award letters, and strengthened entrance and exit loan counseling. Additionally, the current 90-10 rule for for-profit institutions, which requires that for-profit colleges receive no more than 90 percent of their revenues from Title IV federal student aid, would be changed to 85-15.

House HEA Reauthorization White Paper and Four Bills

On June 26, various members of the House Education and the Workforce committee introduced three separate bills related to higher education affordability and transparency. Following the July 8 release of a fourth bill, NASFAA sent a letter to the House regarding the bills which address the use of prior-prior year income (PPY) in need analysis, counseling for Pell recipients and additional counseling for borrowers, transparency for students and families, and the treatment of competency based programs in Title IV.

The Republican-led House committee also released a white paper on June 25 outlining the party’s priorities for the upcoming HEA reauthorization. In addition to the proposals already released, the white paper addresses a “Flex Pell” grant that would allow eligible students to learn of their Pell funds for a six-year period and draw from those funds until they are exhausted or the academic program is completed Similar to Democratic proposals in the Senate, House Republicans propose streamlining the loan repayment process to include a 10-year standard option and a modified IBR option.

The white paper included some general goals Republicans would aim to achieve during reauthorization. These include:

  • Improving and streamlining the Integrated Postsecondary Education Data System (IPEDS) and consumer information;
  • Enhancing loan counseling by making it an annual requirement;
  • Eliminating overly burdensome federal regulations; and 
  • Promoting innovative learning models.

The House also stated its intention to prohibit a college ratings system and to challenge upcoming changes to gainful employment regulations and potential changes to state authorization regulations.


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