NAICU Washington Update

It's Not Over ‘Til It's Over - HEA Bill Now Heads to Conference

The Higher Education Act reauthorization bill is finally headed to conference after the House approved its version by a margin of 354-58 on Thursday, February 7. It is expected that conference will begin very quickly, and that a final bill will be completed before the current HEA extension expires on March 31.

The bill is a mixed bag for independent colleges. On the plus side, all the major student aid programs have been sustained, despite efforts either to eliminate or fundamentally change programs that have worked effectively for generations. Also in the bill is a strong restriction on the Secretary of Education that prevents her from using accreditation as a tool for regulating student learning outcomes. This restriction triggered an official statement from the administration that stopped just short of a veto threat, and an even angrier op ed by the Secretary.

Traditional colleges also scored a major win over the proprietary sector's efforts to set federal rules for colleges on the awarding of transfer credit. What emerged in the final bill was simply a requirement for colleges to make their transfer policies more transparent. The final bill also removes language that would have prescribed oversight of institutional aid, as well as confusing language on involving private colleges in a mandate for states to establish higher education articulation agreements.

Also in the win column for the college community was the defeat of a proposal by Rep. Peter Welch (D-Vt.) that would have required a mandatory 5 percent pay-out from every college endowment, with the funds used to either reduce tuition or increase need-based aid. Despite the initial appeal of the provision on the Hill, college presidents acted with such speed and force that Welch withdrew his amendment within hours of offering it. Likewise, after vigorous opposition from higher education, the Rules Committee disallowed an amendment by Rep. Steve King (R-Iowa) that would have required tracking of students admitted under affirmative action policies sanctioned by the Supreme Court.

On the negative side, the House bill contains an even more complex array of college pricing requirements than the Senate bill. Under the House bill, the 5 percent most expensive and the 5 percent least expensive colleges, by sector, will appear on public lists. A third group of schools - the 5 percent with the greatest percentage increase in tuition by sector and type over the preceding three years - would face a series of sanctions, including creating "Quality-Efficiency Task Forces" to explore how to reduce costs on campus.

The House bill also calls for the Secretary of Education to develop a net price calculator for families, with colleges required to place the calculator on their Web sites within three years. Additionally, colleges would have to collect and report a dizzying array of new data, for the Department of Education to use in producing a "Higher Education Pricing Summary Page" for each college.

The bill's complexities on cost became even more problematic on the House floor, with the addition of an amendment by Michael Castle (R-Del.) that borders on price controls. His amendment would require the Quality-Efficiency Task Forces mentioned above to also develop annual benchmarks. Institutions not meeting the benchmarks then would have to give detailed explanations of why the benchmarks weren't met. NAICU opposed the amendment.

NAICU also opposed a successful amendment by Patrick Murphy (D-Pa.) and Sue Myrick (R-N.C.) to require that colleges provide all students with an estimate of their total net costs until degree completion.

Also overwhelming are the myriad reporting requirements that would be imposed on colleges if the House version of the bill survives conference. These include federal mandates and reports on illegal file sharing, textbooks, drug and alcohol violations, distance education, missing persons, emergency response, and fire safety.

Other provisions in the House bill include new conflict-of-interest rules on student lending, in response to last year's student loan scandals. The rules would limit the parameters on colleges and lenders working together in developing preferred lender lists. They also would ensure that even students receiving private loans have uniform federal disclosures on the terms and conditions, and that private-loan students are informed of less expensive federal student aid options.

As the bill moves forward, keep an eye open for NAICU Action Alerts in the coming weeks, as we seek your help in assuring that the best bill possible emerges from conference.

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