NAICU Washington Update

Finally – A Senate Higher Education Reauthorization Bill

July 25, 2007

In a major victory for the higher education community, the Higher Education Act (HEA) reauthorization bill approved by the Senate on July 26 strikes provisions of the bill that would have imposed rigid measures of student learning through the accreditation system.  Adoption of that provision, authored by Sen. Lamar Alexander (R-Tenn.) addressed NAICU's primary concern with the Senate bill.  (See WIR, 7/03/07)  

The Senate approved S. 1642 by a vote of 95-0.  Relatively few changes were made to the bill over two days of debate.

The final version also modifies the original transfer-of-credit provisions so that an institution's right to make its own decisions about award of academic credit is preserved.  In addition, the measure includes a number of new cost-reporting provisions of the bill – but none of these provisions cross into the "price control" realm.

The bill makes important changes to some student aid programs.  For one, it corrects eligibility provisions for ACG and SMART grants that have been confounding student financial aid administrators and students since the inception of the programs.  These include making legal aliens and students at institutions with certain unique curricula eligible for the grants, and aligning the grant disbursement period with Pell Grant awards.  It also returns authority for defining "critical foreign languages" to the Secretary of Education, and drops the requirement that these languages must be critical to national security.

The bill makes several improvements in Title VI, such as providing grants for undergraduates to study foreign languages.  Unfortunately, however, language requiring "academic diversity" is still contained in this portion of the bill.

S. 1642 does not include the most problematic provisions in H.R. 890, the Student Loan Sunshine Act, passed by the House in May, such as prohibiting college presidents from serving on bank boards, or bank representatives from serving as college trustees.  Also, student aid administrators would be allowed to have their expenses reimbursed by lenders for advisory service to a lender.  

The bill requires lenders to provide specified information to borrowers – including interest rate, types of repayment plans available, when interest is capitalized, all fees, and default collection practices.  Lenders also must report to the Secretary information relating to any reimbursements made to student financial aid administrators. The language may still need to be clarified, however, since it is not clear how some of the requirements would be met by other entities affiliated with a college.

_x000C_The major floor battle was over an amendment offered by Sen. Tom Coburn (R-Okla.)  that would have prohibited use of tuition funds or federal grants to hire "registered lobbyists" to influence federal legislation or any other federal activity.   With considerable help from the NAICU Secretariat, the state executives, and many NAICU presidents, we aggressively fought the amendment on the basis that it was an inappropriate restriction on colleges' ability to make legitimate contacts with federal officials – noting that small, tuition-dependent institutions would be particularly hard hit.

The Coburn amendment was modified by the adoption of a second-degree amendment by Sen.  Edward Kennedy (D-Mass.) which was approved by a vote of 93-0.  This modification improves the original Coburn language, but still raises some questions and concerns.  

The NAICU membership also played an active and important role in calling attention to problems with several other proposed amendments:
  • An amendment by Sen. Judd Gregg (R-N.H.)  that attempted to connect increases in tuition and fees to increases in the Pell Grant maximum, was not offered.
  • Likewise, an amendment by Sen. Dick Durbin (D-Ill.) dealing with textbooks was not offered.
  • An amendment by Sen. Harry Reid (D-Nev.) on file-sharing was withdrawn, and the provision requiring implementation of a technology-based deterrent was dropped entirely.  Additional file-sharing reporting requirements were included in the managers' amendment, however.  This outcome, while not perfect, was a big improvement over the original proposal.
The House has not yet put together its HEA reauthorization bill.   Given that the Senate has completed action on it, though, we expect the House to quickly pull together a proposal.  In the meantime, the Senate passed S. 1868, extending the Higher Education Act's authority until October 31, 2007, and the House plans to act soon on this extension.However the rest of the process unfolds, we anticipate a great deal of activity in the next two months, and a likelihood that action will be completed on both reauthorization and reconciliation this fall.

MORE News from NAICU