# Presentation: 674568

## Higher Education Opportunity Act

- David Bergeron
- Dan Madzelan
- Office of Postsecondary Education

## BackgroundHigher Education Opportunity Act (HEOA)

- Higher Education Act of 1965 expired in 2004
- Reauthorized HEA after 16 extensions
- Signed by the President on August 14, 2008
- Became Public Law 110-315
- House Bill (H.R. 4137) passed 2/7/2008
- Senate Bill (S. 1642) passed 7/24/2007
- Web site:  _[http://](http://www.ed.gov/heoa)__[www.ed.gov/heoa](http://www.ed.gov/heoa)_

## Recent Legislation  

**Recent Legislation** ** **

- Higher Education Reconciliation Act (HERA) – February 8, 2006
- College Cost Reduction and Access Act (CCRAA) – September 7, 2007
- Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) – May 7, 2008
- Extended by HR 6899
- Higher Education Opportunity Act (Reauthorization) – August 14, 2008

## Higher Education Reconciliation Act (Public Law 109-171)

- Reauthorized Student Loans Through 2012
- Created Academic Competitiveness and National SMART Grants
- Increased FFEL and DL Loan Limits
- Reduced Loan Origination Fees
- Provided for Consistent Repayment Plans

## Higher Education Reconciliation Act (Public Law 109-171)

- Streamline FAFSA
- Need Analysis Formula
- Reduced Insurance
- PLUS Interest Rate
- “Negative SAP”
- College Access Initiative

## College Cost Reduction and Access Act (Public Law 110-84)

- Reauthorized Pell Grants Through 2017
- Mandatory Increases for Pell and Upward Bound
- Reduced Interest Rates
- Need Analysis Formula
- Income-based Repayment
- Economic Hardship Deferment

## College Cost Reduction and Access Act (Public Law 110-84)

- TEACH Grants
- Public Service Loan Forgiveness
- College Access Challenge Grants
- Reduced Lender Insurance
- Reduced SAP
- Parent PLUS Auction Pilot Program

## Ensuring Continued Access to Student Loans Act (ECASLA)(P.L. 110-227)

- Extended by HR 6899 (Public Law 110-350)
- ECASLA Authorizes the Secretary
- To purchase FFEL loans, at -
- No net cost to the government
- Under terms and conditions established by the Secretary in consultation with Treasury and OMB
- No statutory authority to provide advance funding

## Higher Education Opportunity Act(Public Law 110-315)

- Consumer Information and Disclosures
- Application for Federal Student Aid
- Student Grant Programs
- Student Loan Programs
- Institutions and Institutional Grant Programs

**Notes:**

Maximum award for 2007-2008 would remain at $4,050
Pell Grants would be made available year-round at eligible 2- and 4- year degree granting institutions, to encourage students to accelerate their studies.
As an incentive for students to complete their programs on-time and to eliminate an area of potential abuse, Pell Grant eligibility would be limited to the equivalent of 16 semesters.
Propose to eliminate the “third award rule” related to tuition sensitivity.  The rule currently limits the amount of support that students with greatest need receive while attending low-cost institutions.

## Consumer Information and Disclosure 

- Greater transparency in college costs
- ED required to develop & release:
- Information relevant to college cost & net price by institution
- College cost & net price watch lists
- Internet-based calculators of the net price of college for consumers

## Consumer Information and Disclosure 

- Institutions must:
- Disclose relationships with preferred lender arrangements
- Adopt “codes of conduct” to govern their relationships with financial institutions
- Lenders must comply with the Truth in Lending Act for “private label” education loans

## Consumer Information and Disclosure: Textbooks

- Publishers must inform faculty of price and editorial changes
- Institutions must:
- To the maximum extent practical, post ISBN numbers and retail prices of required and recommended textbooks and supplemental materials

## Consumer Information and Disclosure: Textbooks

- Institutions must provide its college bookstore with the course schedule, the list of required and recommended textbooks and supplemental materials, and the average and maximum enrollment in each course

## Free Application for Federal Student Aid (FAFSA) 

- Simplify the FAFSA
- Create an EZ FAFSA
- Continues limiting the Secretary’s authority to modify the formula used to calculate the expected family contribution
- Requires ED to report to Congress on simplification
- Mandates a study by GAO to examine alternative methodologies for calculating an EFC

## Free Application for Federal Student Aid (FAFSA) 

- Mandates an early application demonstration program to allow dependent students to apply for aid during their junior year in high school
- Authorizes the Secretary to use IRS data to prepopulate (with prior-prior year data) the FAFSA or verify income and other information on the FAFSA
- 	Note:  No change to Internal Revenue Code

## Pell Grant Program 

- Effective with the 2009-2010 award year
- “Year round” Pell Grant
- Lifetime limit - equivalent to 18 semesters
- Minimum grant equal to 10% of the appropriated maximum grant
- Maximum award for any Pell Grant eligible student whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001

## ACG and National SMART Grants

- Beginning with 2009-2010 award year
- Extends eligibility to certain non-citizens
- Extends eligibility to at least half-time students
- Aligns grant awards and disbursements with Pell Grants
- Replaces academic year basis for awards with student’s grade level

## Academic Competitive Grants 

- Requires appropriate State official to submit rigorous high school curriculum to ED
- Clarifies that rigorous curricula include those recognized by ED in current  regulations

## Academic Competitive Grants 

- Authorizes awards for one- and two-year certificate programs if the student is attending a two- or four-year degree granting institution
- Amends the provision regarding previous enrollment for first-year grant eligibility by creating an exception for students whose previous enrollment in an undergraduate program was part of a secondary school program of study

## National SMART Grants

- Authorizes grants to students attending institutions offering a single liberal arts curriculum leading to a baccalaureate degree in which students are not permitted by the institution to declare a major in a particular subject area
- Authorizes a fifth-year grant to students enrolled in the fifth year of a National SMART Grant-eligible program that requires five years to complete

## TEACH Grant Program 

- High need fields when agreement to serve was completed will remain valid even if field no longer approved
- Categories of extenuating circumstances under which a recipient of a TEACH Grant may be excused from fulfilling the service obligation can be established by regulations

## Federal Work-Study Program

- Emphasizes employment in civic education
- Continue compensating disaster-affected students
- Creates new discretionary grant program for off-campus employment in community service
- Continues the existing “Work College” program

## Perkins Loans 

- Increases annual and aggregate loan limits –
- Annual $5,500 for undergrad
- Annual $8,000 for grad
- Aggregate $60,000 for grad
- Aggregate $27,500 for upper division undergrad
- $11,000 for all others

## Perkins Loans

- Prescribes mandatory assignments
- Increases loan limits
- Prescribes additional eligibility criteria for total and permanent disabilities discharges
- Streamlines loan rehabilitation
- Expands loan forgiveness

## Fails to provide a long-term solution to the current profitability, liquidity and capacity issues in the student loan programs
Requires the Secretary to oversee private education loans made by FFELP lenders to students attending Title IV institutions

- Requires the Secretary to oversee private education loans made by FFELP lenders to students attending Title IV institutions

**Federal Family Education Loans (FFEL)**

## Addresses lender and guaranty agency inducements
Provides for more consumer information from lenders, guaranty agencies, schools and ED

- Provides for more consumer information from lenders, guaranty agencies, schools and ED

**Federal Family Education Loans (FFEL)**

## Changes Cohort Default Rate Calculation
From two years to three years
Transition Period
30% Penalty Threshold

- From two years to three years
- Transition Period
- 30% Penalty Threshold

**FFEL & Direct Loans**

## Increases “disbursement relief” CDR to 15%
Effective October 1, 2011
Changes to Disability Discharge Requirements
Waiver of interest for military in combat zones

- Effective October 1, 2011
- Changes to Disability Discharge Requirements
- Waiver of interest for military in combat zones

**FFEL & Direct Loans**

## Removes VA Educational Benefits from Estimated Financial Assistance
Also from “Resources” for campus-based aid
Effective with the 2010-11 award year

- Also from “Resources” for campus-based aid
- Effective with the 2010-11 award year

**FFEL & Direct Loans**

## Dependent students eligible for unsubsidized without parental FAFSA information	
Effective on enactment – August 14, 2008
Paper FAFSA or EDE Submission
Special process for Direct Loans

- Effective on enactment – August 14, 2008
- Paper FAFSA or EDE Submission
- Special process for Direct Loans

**FFEL & Direct Loans**

## Provides new loan forgiveness opportunities, if Congress appropriates funds, for:
EARLY CHILDHOOD EDUCATORS
NURSES
FOREIGN LANGUAGE SPECIALISTS
LIBRARIANS
HIGHLY QUALIFIED TEACHERS SERVING STUDENTS WHO ARE LIMITED ENGLISH PROFICIENT, LOW-INCOME COMMUNITIES, AND UNDERREPRESENTED POPULATIONS
CHILD WELFARE WORKERS
SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS
SCHOOL COUNSELORS
PUBLIC SECTOR EMPLOYEES
MEDICAL SPECIALISTS
MENTAL HEALTH PROFESSIONALS
DENTISTS
STEM EMPLOYEES
PHYSICAL THERAPISTS
SUPERINTENDENTS, PRINCIPALS, AND OTHER ADMINISTRATORS
OCCUPATIONAL THERAPISTS
CIVIL LEGAL ASSISTANCE ATTORNEYS

- EARLY CHILDHOOD EDUCATORS
- NURSES
- FOREIGN LANGUAGE SPECIALISTS
- LIBRARIANS
- HIGHLY QUALIFIED TEACHERS SERVING STUDENTS WHO ARE LIMITED ENGLISH PROFICIENT, LOW-INCOME COMMUNITIES, AND UNDERREPRESENTED POPULATIONS
- CHILD WELFARE WORKERS
- SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS
- SCHOOL COUNSELORS
- PUBLIC SECTOR EMPLOYEES
- MEDICAL SPECIALISTS
- MENTAL HEALTH PROFESSIONALS
- DENTISTS
- STEM EMPLOYEES
- PHYSICAL THERAPISTS
- SUPERINTENDENTS, PRINCIPALS, AND OTHER ADMINISTRATORS
- OCCUPATIONAL THERAPISTS
- CIVIL LEGAL ASSISTANCE ATTORNEYS

**FFEL & Direct Loans**

## Accreditation

- Abolishes NACIQI (Secretarial appointees)
- Creates a new committee appointed by Congress and the Secretary
- No new appointments before February 1, 2009
- Secretary is prohibited from establishing criteria that specify, define, or prescribe the standards an accrediting agency uses to assess an institution’s success with respect to student achievement

## Institutional Grant Programs

- Mandatory funding for three programs:
- Promoting Post-baccalaureate Opportunities for Hispanic Americans
- Masters Degree Programs at Historically Black Colleges and Universities (HBCUs)
- Masters Degree Programs at Predominantly Black Institutions (PBIs)

**Institutional Grant Programs**

## Institutional Grant Programs

- Federal TRIO Programs:
- Mandates an appeal process that could include a second peer review
- Establishes clear program performance expectations for funded projects related to the awarding of prior experience points
- Divides program activities into required and permissible activities and places greater emphasis on financial literacy as a permissible activity
- Gives the Secretary authority to make a one-time synchronizing adjustment to grant periods

## Institutional Grant Programs

- Javits Fellowships
- Modifies requirements related to the Javits Fellowship Board
- Graduate Assistance in Areas of National Need
- Consult when determining areas of national need
- Clarifies eligibility of master’s degree-granting IHEs
- FIPSE
- Shifts authority to make grants to the Secretary
- Scholarships for family members of veterans or members of the military

**Institutional Grant Programs**

## Implementation

## Regulations

- Public Hearings
- Johnson C. Smith University
- Cuyahoga Community College
- Texas Christian University
- University of Rhode Island, Providence Campus
- Pepperdine University
- U.S. Department of Education
- http://www.ed.gov/heoa

## Regulations Subject to Negotiation

- Notice Announcing Formation of Committees and Solicitation of Nominations to Serve as Non-Federal Negotiators	12/08
- Negotiating Committees Established	1/09
- Negotiations End	4/09
- NPRM Published in the Federal Register	8/09
- Public Comment Period Ends	9/09
- Final Published in the Federal Register	11/1/09

## All Other Regulations

- Draft NPRM Prepared     	        Now--1/2009
- NPRM Submitted to OMB for Clearance	1/2009
- NPRM Published in the Federal Register	2/2009
- Public Comment Period Ends	3/2009
- Final Regulation Prepared	4/2009-5/2009
- Final Submitted to OMB for Clearance	6/2009
- Final Published in the Federal Register	7/2009

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