HEA Reauthorization and Washington Update

Tom BabelVice President, Regulatory Affairs

DeVry Education Group

NASFAA HEA Reauthorization Task Force Recommendations

• http://www.nasfaa.org/reauth/• Task Force– Convened January 2012– 18 members, 5 subcommittees– 37 listening sessions around the country– Recommendations issued July 2013

• Use Prior Prior Year (PPY) data for EFC• Auto Zero – Eliminate the dislocated worker

criterion as an automatic qualifier for auto-zero

• Strengthen school authority to set living costs in COA based on enrollment status or other factors

NASFAA HEA Reauthorization Need Analysis

• Eliminate independent student status related to homelessness

• Add receipt of SSI, TANF or General Relief benefits as sole qualifiers for an Auto Zero EFC determination

• Eliminate the Simplified Needs Test

NASFAA HEA Reauthorization Need Analysis

• Direct ED to study regional cost of living in Income Protection Allowance (IPA)

• Treat Foreign Income Exclusion as untaxed income

• Add back any business capital, and other losses that do not represent a real loss of income

NASFAA HEA Reauthorization Need Analysis

• Eliminate exclusions for small businesses and farm value from assets

• Expand and refine IRS Data Download to maximize use

• ED and IRS conduct a feasibility study using the 1040 as the primary Federal Student Financial Aid Application

NASFAA HEA Reauthorization Need Analysis

• Direct Secretary to explore ways the IRS-DRT model could be extended to other Federal agencies, States and institutions

• Treatment of unmarried partners or single sex couples

• Definition of “dependent” in family size

NASFAA HEA Reauthorization Need Analysis

• Interest rate: variable, fixed, “stepped”

• Eliminate loan fees

• School authority to limit loan amounts

• Eliminate proration for programs longer than 1 year

• Separate Grad PLUS and parent PLUS

NASFAA HEA Reauthorization Loans

• Annual and aggregate loan limits– Establish one annual subsidized limit by

eliminating differences based on year in school– Increase annual and aggregate loan limits– Step aggregate limits - lower limit applies to

undergraduate students who have not yet successfully completed second year

– Simplify the subsidized/unsubsidized structure

NASFAA HEA Reauthorization Loans

• Allow unequal loan disbursements

• Reinstate ED authority to offer repayment incentives

• Allow late loan origination for 30 days

• Separate refinance option from consolidation

NASFAA HEA Reauthorization Loans

• Continue need-based borrower subsidies• Remove the 150% subsidy limit• Universal loan portal• Standardize loan servicing policies and

procedures• Revisit institutional requirements for

private lender lists

NASFAA HEA Reauthorization Loans

• Require review of current requirements and restrict to undergraduates

• Shift provision of loan disclosures to ED• Decouple Constitution Day, voter

registration, athletic disclosures• Shift requirement to provide State

assistance information to central Federal site

NASFAA HEA Reauthorization Consumer Information

• Limit calculation to undergraduates• Narrow definition of schools required to

take attendance• Subject calculations to institutional

published withdrawal policies• Pro-rata calculation by week

NASFAA HEA Reauthorization R2T4

• Allow FAA discretion, within published policy, on post-withdrawal disbursements

• Account for restricted institutional aid in calculation of institutional charges

• Increase allowable processing time from 45 to 60 days

• Modify order of return

NASFAA HEA Reauthorization R2T4

• Direct ED to seek public comment to ease R2T4 burden and complexity; require dedicated negotiated rulemaking

• Require report to Congress on ways to make R2T4 less burdensome, especially for programs offered in modules.

NASFAA HEA Reauthorization R2T4

• Increase overaward tolerance and include Direct Lending

• Restore earned credit ability-to-benefit

• Eliminate tie to Selective Service

• Eliminate tie to drug convictions

NASFAA HEA Reauthorization Pell and General Provisions

• Maximize consistency of reinstatement of student eligibility among programs

• Accept data base match for I-9 employment eligibility verification

• Allow payment of currently non-automatic allowable charges unless student opts out

NASFAA HEA Reauthorization Pell and General Provisions

• Make Pell Grant a true entitlement

• Eliminate tie to default rates

• Allow 1 more payment beyond LEU to enable completion

• Year-round Pell

NASFAA HEA Reauthorization Pell and General Provisions

• Increase flexibility on transfers of funds

• Revise distribution of school’s Perkins Fund if program ends

• Expand definition of community service

• Fund community service on separate request

NASFAA HEA Reauthorization Pell and General Provisions

• Eliminate private sector employment cap

• Tie FSEOG eligibility to Pell-eligible EFC range rather than actual receipt, and eliminate lowest EFC order

• Allocation formula remains in development

NASFAA HEA Reauthorization Pell and General Provisions

HEA ReauthorizationSenate Hearings

• 11/14/13

• 10/31/13

• 9/16/13

Ensuring Access to Higher Education: Simplifying Federal Student Aid for Today’s College Student

Attaining a Quality Degree: Innovations to Improve Student Success

The Triad: Promoting a System of Shared Responsibility. Issues for Reauthorization of the Higher Education Act

HEA ReauthorizationHouse – Keeping College Within Reach

• 11/13/13

• 9/18/13

• 9/11/13

• 7/9/13

Simplifying Federal Student Aid

Improving Access and Affordability through Innovative Partnerships

Supporting Higher Education Opportunities for America’s Servicemembers and Veterans

Improving Higher Education through Innovation

• 6/13/13

• 4/24/13

• 4/16/13

• 3/13/13

Discussing Program Quality through Accreditation

Enhancing Transparency for Students, Families and Taxpayers

The Role of Federal Student Aid Programs

Examining Opportunities to Strengthen Federal Student Loan Programs

HEA ReauthorizationHouse – Keeping College Within Reach

Legislation Impacting Higher Ed

• College Cost Reduction and Access Act of 2007– Fixed loan interest rates, public service forgiveness

• Ensuring Continued Access to Student Loans Act of 2008– Increased annual and aggregate Stafford limits, allowed

Parents to defer PLUS payments

• America Recovery and Reinvestment Act of 2009– Increased Pell and Hope Scholarship tax credit

• Health Care and Education Reconciliation Act of 2010– Eliminated FFEL, modified IBR plan

• FY2011 Continuing Resolution– Elimination of year-round Pell, LEAP funding and Byrd

Scholarships

• Budget Control Act of 2011– Elimination of Graduate Subsidized Loan and

Origination Fee Rebate

Legislation Impacting Higher Ed

• Consolidated Appropriations Act, 2012 (2011)– Auto-Zero threshold reduced, Pell cap reduced, Grace

period subsidy suspended, ATB eliminated

• Moving Ahead for Progress in the 21st Century Act (2012)– Limited undergraduate loan subsidy to 150% of

program length

• Sequestration (Budget Control Act of 2011)– Increased loan fees, reduced CBA allocations

Legislation Impacting Higher Ed

What’s Next

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