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NAICU members continue to offer the Obama Administration feedback on the President's call to make higher education more affordable for the middle class through a number of initiatives including a new national rating system for colleges and universities.
Student aid related topics will be the focus of an Program Improvement and Integrity negotiated rulemaking committee planned for February 2014, according to an Education Deparmtent notice in the Federal Register on November 20.
On October 30, Reps. Diane Black (R-TN) and Danny Davis (D-IL) introduced the Student and Family Tax Simplification Act which would make the American Opportunity Tax Credit (AOTC) permanent (it is currently set to expire at the end of 2017), but also eliminate the Hope and Lifetime Learning credits and the tuition deduction without allowing a benefit beyond the first four years of college. While any significant movement on tax reform measures is unlikely this year, NAICU continues to advocate for modifications that would prevent any current students or families from losing their tax benefits.
A Department of Education rulemaking panel convened to consider new proposals regarding eligibility of college-based career-training programs to participate in the federal student aid programs was unable to reach consensus last week. A further session is likely in December.
A Congressional conference committee on the FY 2014 federal budget has made little movement forward on setting the top line spending amount, replacing the sequester, or deciding what role entitlement changes will play in a final agreement, despite conducting two public meetings since its creation in the October 17 deal to reopen the government.
As the federal government reopens following the 16-day Congressional shutdown over FY2014 appropriations and the federal debt limit, there are several implications for higher education and more looming deadlines at the end of this year and early 2014. Here is an initial summary of the deal passed by Congress and signed by the President. NAICU will continue to monitor events and provide updates as appropriate.
The Department of Education announced changes in the student aid programs for FY 2014 that will result in small reductions in certain grant awards, including the TEACH and Iraq-Afghanistan Service grants, and higher loan fees for upcoming loans. These additional cuts are the result of the sequester agreement under the Budget Control Act of 2011, which went into effect October 1, 2013, but in the case of Direct Loans won’t be operational until December 1, 2013. Pell Grants were exempted from the effects of the sequester.
The Department of Education has announced its plans to establish a negotiated rulemaking committee to develop regulations dealing with the changes made by the Violence Against Women Reauthorization Act (VAWA) to the campus safety and security reporting requirements of the Higher Education Act.
On September 20, NAICU provided a summary and preliminary guidance for institutions who have received penalty notices from the IRS for failing to provide adequate student tax identifiers like Taxpayer Identification Numbers or Social Security Numbers. We want to clarify that the regulations implementing the higher education tax credits do contain language requiring this information to be furnished by the student or family to the institution. In our alert, we inadvertently said that students cannot be required to provide the information.
On September 30, 2013, the Department of Education released the most recent two-year (FY 2011) and three-year (FY 2010) cohort default rates. According to the Department, private nonprofit institutions had the lowest average cohort default rates for both the FY 2011 two-year rate and the FY2010 three-year rate - 5.2 percent and 8.2 percent - compared to public and for-profit institutions.
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