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
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