Tumultuous Times – Legislative Update - SCASFAA · and conditions of the grant, budgeting and financial literacy information, lifetime eligibility, and approved use of Pell grant

Tumultuous Times –Legislative Update

Joey DerrickDirector, Office of Student Financial Aid and Scholarships

University of South Carolina - Columbia

Agenda1. Refresher – US Legislative Process2. US House of Representatives Legislative Activity3. US Senate Legislative Activity4. South Carolina Legislative Activity5. Advocacy



Higher Education Act Reauthorization: House of Representatives - PROSPER Act• Promoting Real Opportunity, Success, and Prosperity Through

Education Reform (PROSPER)• Sponsored by the House Education and Workforce Committee

Source: http://www.nasfaa.org/PROSPER

http://www.nasfaa.org/PROSPER

Higher Education Act Reauthorization: PROSPER ActChanges to Simplified Needs Test - the Adjusted Gross Income limit to qualify for the SNT would be increased from $50,000 to $100,000.

Discretion of Student Financial Aid Administrators - would allow FAAs to reduce a student’s cost of attendance based on the method of instruction, if they determine the instruction delivery method results in a substantially reduced cost of attendance. It also proposes striking from the Higher Education Act (HEA) language that prohibits institutions from creating a distinction in determining costs for programs that are instructed by means of telecommunications technology.



Higher Education Act Reauthorization: PROSPER ActIncome and Asset Information Used for FAFSA Application - Excludes 529 Plans from the definition of assets. The bill does maintain the inclusion of prepaid tuition plans offered by a state as well as Coverdell plans as assets in calculating need. The bill would also codify the use of prior-prior year tax data on the FAFSA.

Repeal of State Authorization Regulations - Repeals all regulations that define state authorization, including regulations that require distance education-providing institutions to be authorized in each state that has student enrollment as a condition for Title IV federal student aid eligibility. The bill would maintain the requirement that schools be authorized by each state in which the school has a physical location.



Higher Education Act Reauthorization: PROSPER ActUpdates to Accreditation Process - Would not require that accrediting agencies seek special approval from ED to review institutions with distance education programs, nor to conduct special reviews of the Individual distance education programs offered at the institution.

Program Review Timeline - Seeks to establish and enforce a timeline to show how long it should take for ED to conduct, respond to and conclude program review activities, assuming no sufficiently time-consuming complexities arise. Per the new timeline, after the ED program review team concludes its initial visit, it must submit its finding report to the institution no later than 90 days thereafter, must respond “substantively” to an institution’s response to the findings within 90 days, and must then provide a final program review report as well as any “accompanying enforcement actions” within 90 days of the final response from the institution under review. This bill includes measures that seek to reduce the entire program review process to under two years after initiation.



Higher Education Act Reauthorization: PROSPER ActFederal ONE Loan Program - New borrowers of loans for which the first disbursement would be made after June 30, 2019, would have access only to Federal ONE Loans. Interest rates for Federal ONE Loans would be based on 10-year Treasury notes, subject to a cap. Annual loan counseling is required.



Higher Education Act Reauthorization: PROSPER Act

Federal ONE Loan Annual LimitsDependent Undergraduate

First Year $ 7,500

Second Year $ 8,500

Third Year and Beyond $ 9,500

Independent Undergraduate

First Year $ 11,500

Second Year $ 12,500

Third Year and Beyond $ 14,500

Parent PLUS $ 12,500

Graduate/Professional Student $ 28,500



Higher Education Act Reauthorization: PROSPER Act

Federal ONE Loan Aggregate LimitsDependent Undergraduate $ 39,000

Independent Undergraduate $ 60,250

Parent PLUS $ 56,250

Graduate/Professional Student $ 150,000

Select Health Professions Programs $ 235,500



Higher Education Act Reauthorization: PROSPER ActProration and FAA Discretion - For Federal ONE Loans, only academic programs of less than a year in length trigger required proration. However, financial aid administrators would be given discretion to prorate or reduce annual loan limits institution-wide or by academic program based on certain conditions:• Student debt levels are or would be excessive, given the most recent Bureau of

Labor Statistics (BLS) data for average starting salaries in the region in which the institution is located for typical occupations pursued by the program’s graduates;

• Less than full-time or full-year enrollment;• Credential level; or• Year in program.



Higher Education Act Reauthorization: PROSPER ActDisbursement of Federal ONE Loans - For both student and parent borrowers, loans would have to be disbursed in substantially equal monthly or weekly installments over the loan period, but unequal disbursements would be permitted to account for unequal costs or unequal financial assistance. Unequal costs include upfront charges such as tuition and fees.

Repayment and Deferment - Federal ONE Student Loans would be repayable under just two repayment plans: 10-year standard plan, and income-based repayment (IBR) plan



Higher Education Act Reauthorization: PROSPER ActPell Grants - The bill introduces a Pell Grant Bonus Award, worth up to $300 per award year, to be divided equally among each payment period. Institutions will now be required to provide annual in-person or online Pell grant counseling to Pell recipients detailing, among other things, the terms and conditions of the grant, budgeting and financial literacy information, lifetime eligibility, and approved use of Pell grant funds. Pell Grant disbursements, like loans, would be made in substantially equal monthly or weekly installments over the period of enrollment, also known as "aid like a paycheck." Unequal disbursements would be permitted to account for unequal costs or unequal financial assistance. Unequal costs include upfront charges such as tuition and fees.



Higher Education Act Reauthorization: PROSPER ActFederal Work-Study - Eliminates FWS eligibility for all graduate and professional students. The purpose of the FWS program is updated, with the community service component replaced with a work-based learning component, defined as "paid interactions with industry or community professionals in real workplace settings that foster in-depth, first-hand engagement with the tasks required of a given career field, that are aligned to a student’s field of study." The requirement that 7 percent of FWS funds be spent to pay students working in community service positions is eliminated. Significant changes to the allocation formula include a 20% set-aside for institutions with the highest Pell Grant recipient completion rates. Job Location and Development permitted up to $150,000.



Higher Education Act Reauthorization: PROSPER ActCollege Dashboard - Would replace the College Navigator with a similar tool called the College Dashboard. Like the College Navigator, the Dashboard would also present institutional information that can be compared, but there are many changes to the specific information that is presented. The Dashboard must be consumer-tested and the bill specifically removes the Department of Education's (ED) authority to issue associated regulations. Also serves as a vehicle for schools to provide some of the annual consumer information disclosures



Higher Education Act Reauthorization: PROSPER ActReturn of Title IV Funds - The percentage of aid earned would be based on a quarterly assessment of the payment period rather than a day-by-day reckoning. Depending on the range of percentages within which the student's withdrawal date occurs, the amount earned would be zero, 25, 50 or 75 percent of aid.



Higher Education Act Reauthorization: PROSPER ActRegulatory Relief –• Repeal of the regulatory definition of credit hour• Repeal of all gainful employment regulations• Repeal of borrower defense regulations issued on Nov. 1, 2016, which would effectively restore the borrower defense regulations

that were in place prior to the issuance of the Nov. 1, 2016 rules• Repeal of state authorization regulations that established minimum standards of state authorization that an institution must

demonstrate to maintain Title IV eligibility• New statutory language that specifies that the requirement to be legally authorized by a state applies only to states in which the

institution maintains a physical location• Prohibition on any future regulations on gainful employment, credit hour, or state authorization• Prohibition on the creation of an institutional ratings system• Repeal of the 90/10 rule applicable to for-profit institutions• Restoration of the Quality Assurance program• New statutory language that specifies that institutions do not need to supply any additional information regarding private loans

except for what is explicitly included in the HEA and a prohibition on any requirements related to an institution’s lender list beyond what is included in the HEA.



Higher Education Act Reauthorization: PROSPER ActTRIO Programs –• Authorized at current authorized level of $900 million (which is $50 million below current

appropriation).• Establishes new criteria for awarding funds.• Sets aside 10% for new applicants who have not previously received a grant.• Sets aside an additional 10% for innovative programs.• Requires a new 20% match from the institution in cash or in kind and may be collected over the

course of the grant (GEAR UP has a 50% match). Allows for the possibility of a waiver.• Additional provisions: Renames “Prior Experience” to “Accountability for Outcomes”; Adoption of

COE recommendations on meaningful outcome criteria for most of the TRIO programs; Establishes Pell Grant eligibility as a means of determining low-income status; and Includes a prohibition on absolute, competitive, or other preference priorities. Requires additional documentation for TRIO outreach programs (i.e., Talent Search and EOC).

Source: http://www.acenet.edu/news-room/Documents/ACE-Summary-of-House-Prosper-Act.pdf

http://www.acenet.edu/news-room/Documents/ACE-Summary-of-House-Prosper-Act.pdf

PROSPER


Higher Education Act Reauthorization: Senate - HearingsSenate Health, Education Labor & Pensions (HELP) Committee held a series of hearings with higher education experts, with a goal of writing a separate bill to reauthorize the Higher Education Act • Sponsored by the House Education and Workforce Committee

Source: https://www.help.senate.gov/hearings

Full Committee Hearing: Reauthorizing the Higher Education Act: Financial Aid Simplification and Transparency 01/18/18 10:00AM

Full Committee Hearing: Reauthorizing the Higher Education Act: Access and Innovation 01/25/18 10:00AM

Full Committee Hearing: Reauthorizing the Higher Education Act: Accountability and Risk to Taxpayers 01/30/18 10:00AM

Full Committee Hearing: Reauthorizing the Higher Education Act: Improving College Affordability 02/06/18 10:00AM

https://www.help.senate.gov/hearings

https://www.help.senate.gov/hearings/reauthorizing-the-higher-education-act-financial-aid-simplification-and-transparency

https://www.help.senate.gov/hearings/reauthorizing-the-higher-education-act-access-and-innovation

https://www.help.senate.gov/hearings/reauthorizing-the-higher-education-act-accountability-and-risk-to-taxpayers

https://www.help.senate.gov/hearings/reauthorizing-the-higher-education-act-improving-college-affordability

Hearings

What Does All of this Mean?• Lots of discussion has occurred, and continues to occur• Little legislative momentum at this time• Current discussions/activity can give us an idea of congressional HEA

priorities


South Carolina State Legislative Activity


















Advocacy1. Work Through Professional Organizations2. Choose Your Battles Wisely3. Remain Informed4. Be Sure You Gain Support from Institutional Leadership5. Stay Strong

Questions?Joey [email protected]

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