HIGHER EDUCATION REAUTHORIZATION BILL RELEASED

The House Higher Education Reauthorization Bill dramatically changes the way Higher Ed is funded.

It’s been nearly ten years since the Higher Education Act (HEA) of 1965 was reauthorized by Congress. The law, which authorizes federal student aid programs has been on an extension since expiring at the end of its last five-year cycle in 2013 and since then it has been authorized only under extensions. The House Committee on Education and Workforce released a 542-page bill to reauthorize the HEA, on the final day of the Annual Federal Student Aid Training Conference, catching many college administrators by surprise. The bill, dubbed the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act provides a starting point for HEA reauthorization but has a lot of new ideas to indeed reform higher education. As is the case with all things political these days, there’s a lot of details to sort out, and more to come. You can read a full summary of the PROSPER Act here. The Senate is expected to introduce their version of an HEA Reauthorization bill in 2018.
The Early analysis provided by the National Association of Student Financial Aid Administrators (NASFAA), says the legislation is a “mixed bag of gains, losses for students”. In their gains column, incentives for on-time completion, caps, on student loan interest accrual, the elimination of loan origination fees and an increase in Federal Work-Study funding. NASFAA also lauded the bill’s simplification of Return to Title IV (R2T4) ideas, and increased counseling requirements, however, they noted that graduate students stand to lose some loan funding and even access to FWS due to limits imposed in the bill. You can read NASFAA’s full statement here.
One of my favorite higher education bloggers, Robert Kelchen notes that the PROSPER Act would “undo many Obama-Era regulations and salt the earth on future regulations” including Gainful Employment, Borrower Defense to Repayment, Credit Hour Definitions, and the federal college rating system. He points out that one of the key components included in the bill would consolidate aid programs into a One Loan, One Grant system with higher loan limits for undergraduates which would provide up to $14,500.00 under PROSPER; something that would certainly test the bennet hypothesis, especially at for-profit schools, subject to the 90/10 rule. However, the PROSPER Act would give FAO’s the authority to reduce student’s borrowing at their discretion. And finally, he notes that the infamous Cohort Default Rate metric which is presently used to hold schools accountable for their outcomes would be replaced by a programmatic repayment rate metric which would require more than 45% of borrowers from a program to keep their loans in good standing or lose program eligibility for FSA funds. You can read Robert Kelchen’ s blog here.
These are just some of the changes contained in the mammoth bill, and we’ll be providing updates and sharing analysis as Reauthorization begins to move forward.