Tag Archives: federal

Federal Language Re: Textbook Costs Goes Into Effect

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It appears that textbook costs to students may be lower in the future given recent federal legislative language.

The federal Higher Education Opportunity Act of 2008 went into effect on July 1, 2010 . Part of the language included in the bill will require the relationship between many textbook publishers and colleges to change.

As of July 1, 2010, publishers are required to disclose prices and revision information when marketing textbooks to professors, which will allow them to choose lower-cost options. In addition, publishers are required to offer all of the items in the textbook bundles for sale separately so students will not be forced to pay for materials they do not need. Finally, the Act encourages Colleges to provide a list of assigned textbooks for each course so students can shop around for the best deal.

U.S. Senate Committee Considers Veterans’ Benefits

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The U.S. Senate Committee on Veterans’ Affairs held another hearing on legislation that would streamline benefits for veterans under the Post-9/11 GI Bill.

S. 3447 would revamp the benefit formula that has been in place since the Post-9/11 GI Bill took effect last year. The bill, as currently written, would establish a new national cap on benefits for private colleges – both for- and non-profit.

The new cap would be derived from the average tuition and fees of all private and public baccalaureate institutions across the nation, instead of the maximum benefit on the highest tuition of any public program in a given state. 

Many higher education officials are supportive of the concept of setting a national standard of benefits and agree with the goal of erasing inequities between states. However, there is concern that the currrent discussion regarding a cap would result inveterans at private institutions receiving less funding in nearly 25 states. Language for the bill is still being hammered out.

In addition, the bill would make small changes with regards to funding for undergraduate education at public institutions and extend benefits to more members of the National Guard and Active Guard Reserve.  This could potentially lead to coverage for an additional 30,000 whom were not covered by the original law.

Finally, the bill extends housing allowances to students taking courses purely online. Though the current GI Bill provides no allowance to students taking on distance education courses, the legislation under consideration would provide those students with 50 percent of the allowance given to residential students.

Senate Passes Financial Legislation That Will Benefit Students

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Yesterday, the U.S. Senate passed sweeping financial reform. The bill will lower the fees colleges pay when students use debit and credit cards and increase oversight of private student loans.

Restoring American Financial Stability Act of 2010 creates the Consumer Financial Protection Bureau in the Federal Reserve that will have authority over most consumer lending including private student loans. In addition, the bill creates an ombudsman position to oversee private student loans.

The bill also requires the Federal Reserve to set “reasonable and proportional” fees for transactions involving debit cards issued by banks with assets of more than $10 billion.  This will provide great benefit to campus bookstores nationwide.

The President is expected to sign the bill soon.

U.S. House Subcommittee Approves Education Appropriations Bill

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Yesterday, the U.S. House Appropriations Subcommittee on Labor, Health and Human Services, and Education approved a $176.4 million FY11 appropriations bill.

The bill provides $2 billion more for the U.S. Department of Education’s discretionary programs than was allocated in FY10, but $1.5 billion less than the Obama Administration requested.

In addition, the bill moves $5.7 billion for the Pell Grant shortfall, which would have been moved to the mandatory side of the budget under Obama’s budget, and counts it as part of Obama’s discretionary budget request.

No education amendments wer adopted in the subcommittee.

The next step for the appropriations bill is the full House Appropriations Committee. The full committee has not scheduled a time to work the bill to date. There is some speculation that a full committee work-up of the bill may not take place, which means Congress would have to pass a Continuing Resolution in order to provide FY11 funding for U.S. Department of Education programs.

Congress Takes Action on FY11 Budget

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The U.S. House Appropriations Commitee’s Labor, Health, and Human Services and Education Subcommittee is expected to begin work on the FY11 Labor, Health and Human Services, and Education Appropriations bill on Thursday.

This appropriations bill will set FY11 spending levels for the U.S. Department of Education programs, including the federal student aid programs.

In addition, the bills will provide a first glance at the difference between Congress and the Administration with regard to education, health, and human service spending. In February the Obama Administration released its FY11 request which asked to increase discretionary education spending by $4.5 billion to $50.7 billion. In addition, the Administratin proposed making the Pell Grants an entitlement program by funding it entirely with mandatory funds and increasing the maximum Pell Grant award by $160 to $5,710.

Though it is positive that action on the education appropriations bill will likely take place this week it is a first step among many. Only six of the twelve subcommittees have reported their FY11 spending bills to the full House Appropriations Committee. The Appropriations Committee has not yet scheduled time to work on the bills.

Furthermore, the Senate’s Labor, Health and Human Services, and Education Appropriations Subcommittee has not begun work on its version of the bill.

If the House and Senate are unable to pass FY11 appropraitons bill, a Continuing Resolution will need to be passed to continue funding for federal programs.

Federal Health Care and Education Reconciliationo Act Takes Effect

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On July 1, the federal Health Care and Education Reconciliation Act took effect.

As of this date several changes go into effect that will directly impact students and higher education institutions in the coming academic year and for many years to come.

  • The bank-based Federal Family Education Loan Act was eliminated and replaced with the Direct Loan Program for all federal student loans.
  • The maximum federal Pell Grant award for the 2010-11 academic year will increase to $5,550, an $800 increase since 2009. The increase is based on the cost savings provided by transitioning to the Direct Loan Program.
  • Pell Grant award increases are now tied to the Consumper Price Index (CPI).
  • Eligibility for the Income-Based Repayment Plan was expanded.
  • The interest rate on new subsidized student loans fell from 5.6% to 4.5%

Mixed Bag for Student Financial Aid

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Washington students received a mixed message with regard to financial aid this week.

On Monday it was reported at the state level that more Washington college students who qualify for state grants based on financial need are being denied.At the federal level, it was noted int he media that students are expected to experience bigger and better grants.

According to Washington’s Higher Education Coordinating Board (HECB) more than 15,000 students who qualify for the state’s largest financial aid program, the State Need Grant, did not receive a grant this year. This is three times the number in previous academic years. The reason there is more demand than there are funds.

At the federal level the story appears to be much less gloomy. An estimated 8.4 million students, approximately 617,000 more than last year, are expected to receive federal Pell Grants in the 2010-11 academic year. In addition, the average student will likely see an increase in the size of their Pell Grant, approximately $220 more.

In addition to the increase in both the size and number of available Pell Grants, eligible students will have access to other grants. On July 1, the federal government will launch the Iraq and Afghanistan Service Grant, which awards $5,500 to any college student whose parent or guardian died while serving in the armed forces in Iraq or Afghanistanafter 9-11.

Finally, the federal government will continue to award Academic Competitiveness Grants of $750 to freshman and $1,300 to Sophomores who qualify for Pell Grants and get good grades in rigorous courses. SMART grants will also continue with a payout of $4,000 to upperclassmen who qualify for Pell Grants and have earned at least B averages while majoring in science, math, or in-demand languages.

Though this appears to be good news on the surface, funding reductions to higher education institutions nationwide will likely limit the improvements to the Pell Grant and other financial aid programs as tuition increases and states find themselves with large funding gaps in state scholarship and grant programs.

Obama Administration Proposes Student Financial Aid Rules

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Last week the Obama Administration proposed a set of rules and definitions to, in their view, strengthen federal student aid programs.

The Notice of Proposed Rulemaking (NPRM) covers several issues.

  • Ensures that only eligible students receive federal funds;
  • Protects consumers from misleading or overly aggressive recruiting practices;
  •  Clarifies state oversight responsibilities; and
  • Clarifies the courses that are eligible for federal aid, and the amount of aid that is appropriate.

The NPRM reflects the work of the U.S. Department of Education and the higher education community around 14 specific issues over the last year.

The NPRM is subject to public comment. The Department plans to closely review all the comments it receives with the goal of publishing a final rule by November 1. This would allow any changes to take effect July 2011.

Obama Administration’s Unpaid Internship Regulations May Limit Opportunities

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In a rapidly shrinking job market, the new graduate faces unparalleled challenges in finding work. Even before the recession, the college internship operated as an intermediary step between education and employment. In April, however, the U.S. Wage and Hour Division released a Fact Sheet on the legalities of hiring unpaid interns, presenting criteria for prospective employers to meet before moving forward with intern employment.

The criteria brings prevailing labor laws into perspective, requiring that the intern “not displace regular employees,” that the internship be “similar to training which would be given in an educational environment,” and that the employer “derives no immediate advantage from the activities of the intern.”

According to a recent article in the New York Times, these requirements may hurt, not help, potential interns. Many companies and institutions that had previously offered unpaid internships cancelled their programs as a result of the Fact Sheet, or cut down on the number of interns they hired. The Times article highlighted the potential unfairness of access to unpaid internships by students who have the means to spend an entire summer without gainful employment. However, in an economic climate that offers few opportunities to young people, it’s hard to begrudge anyone a head start on a career.

Federal Financial Reform Legislation Changes Student Loan Practices

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The Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173) passed the U.S. Senate this week and is now headed to the President’s desk for signature.

The Act has significant implications for the student loan industry. The most significant change provides the newly created Consumer Financial Protection Bureau with authority over virtually all types of non-federal student loans, including those that for-profit colleges make to their own students.  The Bureau will have supervision over loans made by all non-banks and by banks with more than $10 billion in assets.

The Act also creates a separate student loan ombudsman position within the Bureau. The ombudsman position is designed to provide student loan borrowers with a central place for information and to seek assistance with concerns and/or problems.