Tag Archives: federal

Accountability for Higher Education Remains at Forefront for Obama Administration

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Reports from the Higher Learning Commission’s annual meeting emerged this week that indicated the Administration’s intent to continue the pressure initiated during the Bush Administration on colleges and universities to prove they provide a quality education at an accessible price.

The message from national higher education leaders who spoke at the meeting clearly communicated the Administration’s determination to hold colleges and universities accountable for performance or face undesirable consequences if institutions do not make meaningful changes on their own.

As Molly Corbett Broad, the president of the American Council on Education stated, “To the extent that federal policy makers are now willing to bail out banks and other financial institutions, and to take major equity positions in our auto makers, because those companies are too big to fail, then I believe it’s wise for us to assume they will have little reservation about regulating higher education now that they know it is too important to fail.”

So why all of this tough love? The Administration believes the vehicle by which to successfully educate more students to drive the economy is a college education.  However, for this success to materialize the Administration believes their is room for improvement with regards to performance.

Actions that underlie this intention are not hard to find.  In a brief scan of the higher education-related areas in which the Obama Administration has already delved, it is easy to recognize areas that historically would have been viewed as off-limits to federal action.

These include but are not limited to:

Still many college leaders are left scratching their heads with regard to specifics about how to bring about innovation that might persuade critics that believe higher education can be more productive without lowering quality.

The fact is that higher education institutions may not have much time to ponder. As Broad stated at the meeting, “If we fail to act, it is likely that change will be imposed upon us, with potentially serious consequences for the governance structure that has allowed the United States to develop the best, most inclusive ‘higher education system in the world.”

President Obama Signs Student Aid Legislation

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Yesterday, March 30 President Obama signed into law the reconciliation bill passed by Congress this past week.

The new law will make major investments in the Pell Grant Program and other student aid and higher eduation programs.  Many of these investments will be made from the savings at the federal level of the elimination of the Federal Family Education Loan Program (FFELP). In addition, the new law provides health benefits to college health centers and students.

U.S. House Concurs on Senate Amendments; Student-Aid Bill Headed to the President for Signature

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President Obama is expected to sign into law  today the reconciliation bill passed by Congress this week that will bring great change both to health care and student aid in the United States.

Yesterday, the U.S. Senate passed major student aid reform in the afternoon. In the evening, the House considered the Senate-amended legislation and passed the reconciliation bill with a vote of 220-207.

The new law will make major investments in the Pell Grant Program and other student aid and higher eduation programs.  Many of these investments will be made from the savings at the federal level of the elimination of the Federal Family Education Loan Program (FFELP).

Student Aid Bill Hits Bump in U.S. Senate Goes Back to U.S. House for Vote

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Yesterday afternoon the U.S. Senate began nine hours of debate on the floor. Senators considered twenty-nine amendments to alter the reconciliation bill .

Lawmakers sought to vote down amendments in an effort of saving the bill from returning to the House for another vote.  However, this was not to be the case.

In the wee hours of this morning, the Senate Parliamentarian informed Senate leaders of parliamentary problems with at least two provisions.

According to the budget reconciliation rules governing the bill all provisions of the bill must directly affect government spending or revenues. Both of the provisions in question relate to the student aid portion of the bill.

One provision involves changes to the Pell grant program for college students from low-income families. As written the bill would establish an automatic increase in grant awards tied to inflation. The provision in dispute would prevent any reductions in the maximum award. The second provision seems to be mostly a technical issue.

The Senate voted this afternoon to pass the reconciliation bill with a vote of 56-43. The House is expected to take up the bill this afternoon.

Health Care Legislation Benefits Higher Education

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Higher education institutions and students may benefit from the recent passage of health care legislation beyond the changes made to student aid.

While the broader implications for higher education and students are still being fettered out, there are several tangible benefits which students, campus health care centers and medical schools are likely to feel sooner rather than later.

  • College and university-based student health insurance plans are provided a special exemption that allows them to continue even though they do not fit the classification as individual plans or employer-based group plans.
  • As of late September 2010 young adults will be eligible to be covered by their parents’ insurance plans through age 26.
  • Significant expansion of funding for the National Health Services Corps, which helps young doctors who work in underserved areas.
  • Significant expansion of the Title VII Health Professions Education programwhich offers scholarships and loan forgiveness to help diversify allied health professions racially, ethnically, and geographically.

The benefits for students and higher education will become law today upon President Obama’s signature.

U.S. House Passes Student-Aid Bill

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While much of the media has focused on the passage of health care legislation in the last few days, the passage of this bill also signals the passage of student aid reform that many in higher education have worked hard to move forward and waited months for approval.

On Sunday, March 21 the U.S. House of Representatives passed a reconcilation bill to reform student aid and health care by 220-211. The bill makes several changes to student financial aid policy and provides funds to community colleges and historically black higher education institutions. Of much significance is the elimination of the Federal Family Education Loan Program (FFELP) on July 1, 2010 and the use of the estimated savings to increase funding for Pell Grants.

Prior to the passage of the reconciliation bill containing the changes to student aid, the House passed the Senate-passed health care reform package (which also included significant student aid provisions) by a 219 to 212 vote.

The student aid reform included in the reconciliation bill passed by the House was a leaner version of the Student Aid and Fiscal Responsibility Act (SAFRA).  Democrats had to revise the bill when the Congressional Budget Office showed that expected savings from the elimination of the FFELP were lower than previously estimated and eliminate the proposal of several new programs to comply with procedural requirements in the Senate.

Four major provisions that were a part of SAFRA were not included in the student aid legislation passed by the House on Sunday. They include:

  • The Obama Administration’s proposal to revise the Perkins Loan Program
  • A provision to lower interest rates on student loans
  • Funding for Obama’s American Graduation Initiative to help community colleges graduate five million more students by 2020.
  • $2.5 billion for a new College Access and Completion Fund

The passage of the bill by the House clears the way for the legislation to be considered by the Senate as early as this week. Debate on the bill in the Senate will be limited to twenty 20 hours and requires only 50 votes to approve the bill to be signed into law by President Obama. If the Senate makes any changes to the bill, the legislation would have to be sent back to the House for another vote.

President Signs Jobs Bill

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Last Thursday, President Obama signed what some believe is a jobs creations bill. Others argue that it will simply reward businesses that would have hired workers anyway.

The Hiring Incentives to Restore Employment Act (H.R. 2847) spent some time in the legislative process prior to its passage this past week. The bill passed the U.S. Senate on February 24. The U.S. House amended the bill and sent it back to the U.S. Senate for concurrence. The final bill was passed by the U.S. Senate on Wednesday, March 17 .

The bill takes several actions to incentivize job creation, among these actions:  

  • Employers who hire a person without a job do not have to pay the new worker’s social security taxes for the remainder of the year. All private-sector employers, including nonprofits are eligible along with post-secondary schools. Eligible workers must swear in writing that they have not been employed for more than 40 hours during the previous 60 days and must pay their own social secruity tax (6.2% of pay)

 

  • Employers are eligible for a tax credit worth up to $1,000 on their 2011 tax return if they retain the new worker for at least 52 consectuive weeks. The employer is eligible for the lesser of $1,o00 or 6.2 percent of wages paid to the employee over the 52-week period. In addition, the employer must pay the new worker, during the second half of this 52-week period, at least 80% of what it paid during the first half.  

 

  • Includes employers in Puerto Rico and other U.S. possessions and covers Railroad Retirement taxes.

 

  • An employer cannot collect these tax breaks on workers who replace people they laid off, but it can get the incentives on workers who replace ones who quit or were fired for cause.

Final Agreement Reached on Student-Aid Legislation

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This weekend the U.S. House of Representatives is expected to approve the combined student-aid and health-care plan.  This is the culmination of a year-long process as well as much strategy and discussion during the past week to determine a final agreement to overhaul the government’s student-loan system.

The final agreement, the Health Care & Education Affordability Reconciliation Act (H.R. 4872), would end the bank-based system of distributing federally subsidized student loans (FFELP program) and move toward a system in which the U.S. Department of Education would provide all loan money directly to colleges and students (Direct Loan program).

The final agreement would use savings generated from the elimination of the FFELP program (approx. $61 billion over 10 years) to increase the maximum Pell Grant. The maximum Pell Grant, currently scheduled to reach $5,500 for the 2010-11 academic year, would increase by the rate of inflation over most of the next 10 years. 

The effort by the Obama Administration to urge Congress to approve an annual increase equal to the rate of inflation plus one percentage point was eliminated in the final agreement and the start of the annual increases was delayed until 2013.

Finally, the bill:

  • Pays off billions of dollars in accumulated budget shortfalls in the Pell Grant program because of rising college enrollments and demand for the program.
  • Includes $225 million a year to help historically black colleges.
  • Includes $750 million over five years for College Access Challenge Grants, which support states and other governments in efforts to prepare low-income students to enroll and succeed in college.  This is down from the $3 billion in the House version.
  • Includes $2 billion over four-years to help two-year institutions. This is down from the $10 billion in the House version.
  • Includes $1.5 billion over 10 years to finance the Obama Administration’s proposal to increase assistance to borrowers eligible for income-based repayment of a federally subsidized student loan by limiting their mandatory monthly payments to 10 percent of discretionary income, down from 15 percent, and by forgiving their loans entirely after 20 years, instead of the current 25 years. The House version did not include these funds.
  • Eliminates the $9 billion that had been approved in the House version to reduce the interest rate on federally subsidized loans in 2012-13 and subsequent years.  The rate is due to drop to 4.5% for the 2010-11 academic year; 3.4% the following year; and then rise to 6.8% after that.
  • Eliminates a provision in the House version to spend $8 billion on early-childhood-education programs.

So what is next. If the House passes the reconciliation bill, most likely this Sunday, the bill will move to the Senate where it could be voted on as early as next week.

The Latest on Federal Financial Aid

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Yesterday, Congress passed a reconciliation bill that includes provisions to eliminate the Federal Family Education Loan Program (FFELP) and significantly boost funding for the Pell Grant program. The House Budget Committee voted 21 to 16 to report the bill to the full House for a vote.

The reconciliation bill marked-up by the House Budget Committee contained the Student Aid and Fiscal Responsibility Act (SAFRA). That SAFRA language is expected to be replaced with a streamlined bill when the reconciliation bill is sent to the House Rules Committee. The House could vote on the reconciliation bill as early as this week. While the new language has not been released, reports suggest the bill will include the following: 

  • Savings of $68 billion by eliminating FFELP and moving to direct lending.
  • Pay off a portion of the Pell Grant program shortfall and automatically increase the maximum Pell Grant by the Consumer Price Index (CPI)
  • Provide additional funding for Minority Serving Institutions

Unlike SAFRA, the new language is not expected to include:

  •  The Perkins Loan Program overhaul
  • The American Graduation Initiative to provide $10 billion to Community Colleges
  • The $3.5 billion College Access and Completion Fund

Efforts to pass student financial aid legislation still focus on combining an aid bill with health care legislation through budget reconciliation. Specifically, the House plans to pass the healthcare reform legislation that has already been passed by the Senate, clearing that bill to be signed into law. The House also plans to pass a separate reconciliation bill that would combine student aid reform with healthcare provisions to amend the healthcare reform bill passed by the Senate. Senate Democrats would then have to secure 50 votes to clear the reconciliation bill for the President, with Vice President Joe Biden casting the 51st vote.

Reconciliation ProcessBesides the Pell Grant funding provided in the reconciliation bill, the healthcare reform legislation passed by the Senate includes more than $510 million for student aid in the 2010 fiscal year. The Senate healthcare bill would:

  • Eliminate the requirement for independent students to supply parental financial information to apply for aid from the Department of Health and Human Services
  • Increase annual and aggregate Nursing Student Loan
  • Create a pediatric specialty loan repayment
  • Create a Public Health Workforce Loan Repayment Program
  • Make grants to institutions to award scholarships to individuals employed in public and allied health positions
  • Set authorized funding levels for the National Health Service Corps
  • Make grants to institutions to provide need-based financial assistance in family medicine, general internal medicine, or general pediatrics
  • Make grants to institutions to provide tuition and fee assistance to workers employed in long-term care settings
  • Make grants to institutions for financial assistance to general, pediatric, and public health dentistry students
  • Establish various support programs for practitioners of geriatric medicine
  • Make nurse faculty eligible for the existing Nursing Student Loan Repayment Program.
  • Create a United States Public Health Sciences Track, giving students tuition remission and a stipend for up to 4 years, in exchange for a service obligation.
  • Reauthorizes Scholarships for Disadvantaged Students through 2015.
  • Excludes from taxable income all amounts received under the National Health Service Corps Loan Repayment Program, certain related state programs, or under any other State loan repayment or loan forgiveness program that provides for health care services in under-served or shortage areas.

In addition, the bill would require insurance companies offering health insurance that provides dependent coverage of children to continue to make such coverage available for unmarried adult children until the age of 26. The bill specifically allows schools to continue offering their own student health plans.

The bill now goes to the full U.S. House of Representatives for a vote.

Overhaul of No Child Left Behind to Focus on College

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Over the weekend, the Obama Administration unveiled their plan to change the Elemenatry and Secondary Education Act (ESEA), a.ka. No Child Left Behind. The Administration’s blueprint for revising ESEA  focuses on assisting states in raising expectations of students and rewarding schools for producing dramatic gains in student achievement.

The blueprint provides incentives for states to adopt academic standards that prepare students to succeed in college and the workplace and create accountability systems that measure student growth toward meeting the goal that all children graduate and succeed in college rather than grade-level proficiency.

In addition, the Administration’s blueprint would allow states to use subjects (i.e. art, history, science) other than reading and math as part of their measures for meeting federal goals. Also for the first time in the 45-year history of the law the Administration proposes a $4 billion increase in federal education spending, most of which would go to increase the competition among states for grant money and move away from formula-based funding.

Other highlights of the blueprint include:

  • By 2020 all students graduating from high school would need to be ready for college or a career.
  • Provides more rewards (i.e. money and flexibility) to high-poverty schools that are seeing big gains in student achievement and uses them as a model for other schools in low-income neighborhoods that struggle with performance.
  • Punishes the lowest-performing 5 % of schools using aggressive measures (i.e. state takeover of federal funding for poor students, replacing principals and 50% of teaching staff, closing the school).

The Administration’s blueprint now goes before the U.S. House Education and Labor Committee this week.