I 114th CONGRESS 2d Session H. R. 4385 IN THE HOUSE OF REPRESENTATIVES January 13, 2016 Mr. Grayson introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To amend the Higher Education Act to improve higher education programs, and for other purposes.

1. Short title This Act may be cited as the College for All Act . I Federal-State Partnership to Eliminate Tuition 101. Grant program to eliminate tuition and required fees at public institutions of higher education (a) Program authorized (1) Grants authorized From amounts appropriated under subsection (f), the Secretary of Education (referred to in this section as the Secretary ) shall award grants, from allotments under subsection (b), to States having applications approved under subsection (d), to enable the States to eliminate tuition and required fees at public institutions of higher education. (2) Matching funds requirement Each State that receives a grant under this section shall provide matching funds for a fiscal year in an amount that is equal to one half the amount received under this section for the fiscal year toward the cost of reducing the cost of attendance at public institutions of higher education in the State. (b) Determination of allotment (1) Initial allotment For fiscal year 2017, the Secretary shall allot to each eligible State that submits an application under this section an amount that is equal to 67 percent of the total revenue received by the State’s public system of higher education in the form of tuition and related fees for fiscal year 2017. For each of fiscal years 2018 through 2020, the Secretary shall allot to each eligible State that submits an application under this section— (A) an amount equal to the allotment the State received for fiscal year 2017, plus (B) if the State provides additional funds toward the cost of reducing the cost of attendance at public institutions of higher education in the State for any of such fiscal years that is more than the matching funds requirement under subsection (a)(2), an amount equal to such additional funding provided by the State, which amount provided by the Secretary may be used for the activities described in subsection (e)(2). (2) Subsequent allotments Beginning in fiscal year 2021, the Secretary shall determine the median allotment per full-time equivalent student made to all eligible States under this section for fiscal year 2020 and incrementally reduce allotments made to States under this section such that by fiscal year 2026, no State receives an allotment under this section per full-time equivalent student that exceeds the median allotment per full-time equivalent student made under this section for fiscal year 2020. (c) State eligibility requirements In order to be eligible to receive an allotment under this section for a fiscal year, a State shall— (1) ensure that public institutions of higher education in the State maintain per-pupil expenditures on instruction at levels that meet or exceed the expenditures for the previous fiscal year; (2) ensure that tuition and required fees for in-State undergraduate students in the State’s public higher education system are eliminated; (3) maintain State operating expenditures for public institutions of higher education, excluding the amount of funds provided for a fiscal year under this section, at a level that meets or exceeds the level of such support for fiscal year 2016; (4) maintain State expenditures on need-based financial aid programs for enrollment in public institutions of higher education in the State at a level that meets or exceeds the level of such support for fiscal year 2016; (5) ensure public institutions of higher education in the State maintain funding for institutional need-based student financial aid in an amount that is equal to or exceeds the level of such funding for the previous fiscal year; (6) provide an assurance that not later than 5 years after the date of enactment of this Act, not less than 75 percent of instruction at public institutions of higher education in the State is provided by tenured or tenure-track faculty; (7) require that public institutions of higher education in the State provide, for each student enrolled at the institution who receives for the maximum Federal Pell Grant award under subpart 1 of part A of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070a et seq. ), institutional student financial aid in an amount equal to 100 percent of the difference between— (A) the cost of attendance at such institution (as determined in accordance with section 472 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ll )), and (B) the sum of— (i) the amount of the maximum Federal Pell Grant award; and (ii) the student’s expected family contribution; and (8) ensure that public institutions of higher education in the State not adopt policies to reduce enrollment. (d) Submission and contents of application For each fiscal year for which a State desires a grant under this section, the State agency with jurisdiction over higher education, or another agency designated by the Governor or chief executive of the State to administer the program under this section, shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. (e) Use of funds (1) In general A State that receives a grant under this section shall use the grant funds and the matching funds required under this section to eliminate tuition and required fees for students at public institutions of higher education in the State. (2) Additional funding Once tuition and required fees have been eliminated pursuant to paragraph (1), a State that receives a grant under this section shall use any remaining grant funds and matching funds required under this section to increase the quality of instruction and student support services by carrying out the following: (A) Expanding academic course offerings to students. (B) Increasing the number and percentage of full-time instructional faculty. (C) Providing all faculty with professional supports to help students succeed, such as professional development opportunities, office space, and shared governance in the institution. (D) Compensating part-time faculty for work done outside of the classroom relating to instruction, such as holding office hours. (E) Strengthening and ensuring all students have access to student support services such as academic advising, counseling, and tutoring. (F) Any other additional activities that improve instructional quality and academic outcomes for students as approved by the Secretary through a peer review process. (3) Prohibition A State that receives a grant under this section may not use grant funds or matching funds required under this section— (A) for the construction of nonacademic facilities, such as student centers or stadiums; (B) for merit-based student financial aid; or (C) to pay the salaries or benefits of school administrators. (f) Authorization and appropriation There are authorized to be appropriated to carry out this section $47,000,000,000 for fiscal year 2017, and such sums as may be necessary for each of the fiscal years 2018 through 2026. II Student loans 201. Restoration of certain interest rate provisions Section 455(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b) ) is amended— (1) in paragraph (8)— (A) in the heading, by striking on or after July 1, 2013 and inserting on or after July 1, 2013, and before July 1, 2016 ; and (B) by striking on or after July 1, 2013 and inserting on or after July 1, 2013, and before July 1, 2016 each place the term appears; (2) by redesignating paragraphs (9) and (10) as paragraphs (10) and (11), respectively; and (3) by inserting the following after paragraph (8): (9) Interest rate provisions for new loans on or after July 1, 2016 (A) Rates for FDSL and FDUSL Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 2016, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to— (i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus (ii) 2.3 percent, except that such rate shall not exceed 8.25 percent. (B) In school and grace period rules Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after July 1, 2016, the applicable rate of interest for interest which accrues— (i) prior to the beginning of the repayment period of the loan; or (ii) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in subsection (f), shall be determined under subparagraph (A) by substituting 1.7 percent for 2.3 percent . (C) PLUS loans Notwithstanding the preceding paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made on or after July 1, 2016, the applicable rate of interest shall be determined under subparagraph (A)— (i) by substituting 3.1 percent for 2.3 percent ; and (ii) by substituting 9.0 percent for 8.25 percent . (D) Consolidation loans Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which the application is received on or after July 1, 2016, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of— (i) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher 1/8 of 1 percent; or (ii) 8.25 percent. . 202. Borrower modification of interest rates under title IV Section 455(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b) ), as amended by section 201, is further amended by adding at the end the following: (12) Borrower modification of interest rate (A) Modification Notwithstanding any other provision of law, the borrower of a Federal Stafford Loan under section 428, a Federal Direct Stafford Loan, a Federal Unsubsidized Stafford Loan under section 428H, a Federal Direct Unsubsidized Stafford Loan, a Federal PLUS Loan under section 428B, a Federal Direct PLUS Loan, a Federal Consolidation Loan under section 428C, or a Federal Direct Consolidation Loan may elect to modify the interest rate of the loan to be equal to— (i) in the case of a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan, the interest rate that would be applicable to such loan if such loan were first disbursed (or in the case of a Federal Direct Consolidation Loan, first applied for) on the date on which such borrower elects to modify the interest rate of such loan; and (ii) in the case of a Federal Stafford Loan, a Federal Unsubsidized Stafford Loan, a Federal PLUS Loan, or a Federal Consolidation Loan, the weighted average of the interest rates applicable to loans under part B on the date the loan was first disbursed (or in the case of a Federal Consolidation Loan, first applied for). (B) Fixed rate Except as provided in subparagraph (C), an interest rate elected under subparagraph (A) for a loan shall be fixed for the life of the loan. (C) Continuing authority to modify A borrower may elect to modify the interest rate of a loan in accordance with subparagraph (A) at any time during the life of the loan. . III Federal Work-Study Programs 301. Authorization of appropriations Section 441(b) of the Higher Education Act of 1965 ( 42 U.S.C. 2751(b) ) is amended to read as follows: (b) Authorization of appropriations There are authorized to be appropriated to carry out this part— (1) $975,000,000 for fiscal year 2017; (2) $1,500,000,000 for fiscal year 2018; (3) $2,000,000,000 for fiscal year 2019; (4) $2,500,000,000 for fiscal year 2020; and (5) $3,000,000,000 for fiscal year 2021. . 302. Federal Work-Study allocation of funds Section 442 of the Higher Education Act of 1965 ( 42 U.S.C. 2752 ) is amended— (1) by striking subsection (a) and inserting the following: (a) Revision to the federal work study allocation The Secretary shall allocate funds under this section solely on the basis of the self-help need determination described under subsection (c). ; (2) in subsection (c)— (A) in paragraph (2), by striking To determine the self-help need of an institution's eligible undergraduate students, and inserting Until such time as the Secretary establishes a revised method to determine the self-help need of an institution's eligible undergraduate students, in accordance with paragraph (5), ; (B) in paragraph (3), by striking To determine the self-help need of an institution's eligible graduate and professional students, and inserting Until such time as the Secretary establishes a revised method to determine the self-help need of an institution's eligible graduate and professional students, in accordance with paragraph (5), ; and (C) by adding at the end the following: (5) Not later than 1 year after the date of enactment of the College for All Act , the Secretary shall establish revised methods for determining the self-help need of an institution's eligible undergraduate students, as described in paragraph (2), and eligible graduate and professional students, as described in paragraph (3), that shall take into account the number of Federal Pell Grant eligible low- and moderate-income students that an eligible institution serves and provide considerations for eligible institutions that successfully demonstrate improved employment outcomes. The Secretary shall promulgate any regulations necessary to carry out the revised methods of determining an eligible institution's self-help need under this subsection. ; and (3) by adding at the end the following: (f) Funds To expand job location development programs Notwithstanding any other provision of this part, to promote career readiness and improve the employment skills of Federal Pell Grant-eligible students, the Secretary is authorized to enter into agreements with eligible institutions under which such institution may not use more than 20 percent or $150,000 of its allotment under this section, whichever amount is less, to expand job location development programs, which can be coordinated with State and local workforce development boards. . IV Offering Necessary Eligibility for Timely Institutional Matriculation and Enrollment 401. FAFSA pilot program Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 et seq. ) is amended by inserting after section 483 the following: 483A. FAFSA pilot program (a) Purposes The purposes of this section are— (1) to streamline the annual process by which students apply for Federal financial assistance; (2) to reduce the need for students to reapply for such assistance each year; (3) to lower the cost of student borrowing by maintaining important student loan protections, such as the in-school interest subsidy; (4) to strengthen the middle class and reduce income inequality by targeting financial aid to low- and middle-income students; and (5) to ensure that the financial aid application uses income data from prior tax years readily available to students and families to facilitate the widespread and increased use of automated processes, such as at the IRS–Data Retrieval Tool (IRS–DRT), with the goal of reducing errors and easing the time and rigor of the application process. (b) Pilot program authorized The Secretary is authorized to establish a pilot program and select 5 eligible States— (1) in which a student who attends an institution of higher education in the eligible State may submit a single Free Application for Federal Student Aid, as described in section 483 and modified under subsection (d) (referred to in this section as the FAFSA ), to be used as the application to determine the need and eligibility of the student for financial assistance under this title during the official length of the student's proposed postsecondary degree program; and (2) that shall each receive a grant in accordance with subsection (e). (c) Eligible States The Secretary shall select 5 eligible States that are determined by the Secretary to have a strong record of increasing college access and affordability, especially for low-income students, to participate in the pilot program described in subsection (b). The selection of eligible States shall be based on the extent to which the State has— (1) invested, and continues to invest, significantly in public higher education, resulting in a comparatively lower net price for low-income students; (2) allocated State financial aid primarily on the basis of need; and (3) agreed, as a condition of the State's application for the pilot program under this section, to provide all in-State students (as determined by the State) with an offer for State financial aid that— (A) is valid for not less than 2 years and not more than 4 years, as determined by the State; and (B) shall be subject to change only upon certain conditions, such as significant changes in a student's financial circumstances. (d) Single FAFSA submission The Secretary shall implement, in consultation with the 5 selected eligible States, a pilot program to streamline the process of application to determine the need and eligibility of a student for financial assistance under this title that incorporates the following: (1) An option for students that are enrolled in an institution of higher education in a selected eligible State to submit a single FAFSA at the beginning of the student's postsecondary degree program and receive a determination of financial assistance under this title that shall, on a contingent basis, be valid for not less than 2 years and not more than 4 years, as determined by the State. (2) The determination of financial assistance under paragraph (1) shall be made in accordance with part F, except that relevant calculations shall be made using a multi-year average, of 2 or 3 years, from the most recent tax years for which data are available. A student may use previously submitted student and parent taxpayer data to prepopulate the electronic version of the FAFSA, as described in section 483(f). (3) As a condition of the continued receipt of financial assistance under this section, the Secretary may require a student who submits the single FAFSA to respond to a short number of questions (which may be determined by the Secretary), on an annual basis, to determine if there is a change in the financial status of the student (such as whether the student or the student's parent has experienced a substantial increase in annual income) in order to ensure that the student continues to receive the appropriate amount of financial assistance under this title. (4) Notwithstanding paragraph (1), a requirement that students who experience significant changes in their financial circumstances, as determined by the Secretary, will be required to resubmit the FAFSA in order to receive a new determination of financial assistance under this title. (5) An income verification process— (A) which the Secretary, through the establishment of a memorandum of understanding with the Secretary of the Treasury, will develop to share the income tax data of a random sample of students who have received Federal assistance under this title, including Federal Pell Grants under section 401 and loans made under part D; (B) to ensure that students who have not resubmitted a FAFSA in accordance with paragraph (3) did not have a significant change in financial circumstances that would have required them to do so; (C) that shall be carried out in a way so as to ensure that no personally identifiable information is made public through the income verification process; and (D) that will be carried out only with the consent of students, whose consent will be requested as part of the annual response required under paragraph (3). (6) An option for students to request professional judgment or resubmit their FAFSA each year, to receive a new determination of eligibility for financial assistance under this title. (e) Grant amount Each eligible State selected under this section shall receive a grant to increase public awareness of, and promote the use of, the single FAFSA that may be submitted under the pilot program to be used as the application to determine the need and eligibility of the student for financial assistance under this title during the official length of the student's proposed postsecondary degree program. (f) Supplement not supplant Grants provided under this section shall be used to supplement, and not supplant, State funds that are used to improve college access and affordability. (g) Evaluation Not later than 3 years after the date of enactment of the College for All Act , and 5 years thereafter, the Secretary shall prepare and submit to the authorizing committees a report that contains an evaluation of the effectiveness of the pilot program under this section in improving college access, increasing FAFSA submission rates, and increasing postsecondary education credit and course accumulation. . 402. Prior, prior year Section 480(a)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087vv(a)(1) ) is amended by striking subparagraph (B) and inserting the following: (B) Notwithstanding section 478(a) and beginning not later than 180 days after the date of enactment of the College for All Act , the Secretary shall provide for the use of data from the second preceding tax year when and to the extent necessary to carry out the simplification of applications (including simplification for a subset of applications) used for the estimation and determination of financial aid eligibility. Such simplification shall include the sharing of data between the Internal Revenue Service and the Department, pursuant to the consent of the taxpayer. .