NAICU Washington Update

HEA Reauthorization Timeline—Three Programs Set to Expire Absent Congressional Action

September 17, 2015

Both the House and Senate continue to work behind the scenes to construct legislation to reauthorize the Higher Education Act (HEA). Absent congressional action, the Higher Education Act will expire on September 30, 2015.

Congress has been informed by counsel for the Department of Education that it does not have to pass temporary extensions to keep the bill in effect beyond the September 30, 2015 expiration date. This would be a departure from previous congressional procedure, which required a series of temporary reauthorizations to keep the law in effect—HEA was temporarily reauthorized fourteen times from 2004 to 2008.

However, there are three programs which will expire on September 30, 2015, given the hard sunset date written into the law in 2008, which are:

  • The Perkins Loan program
  • The National Advisory Committee on Institutional Quality and Integrity (NACIQI)
  • The Advisory Committee on Student Financial Assistance

The most pressing concern for private, nonprofit colleges and universities is the extension of the Perkins Loan program. Although students who have received Perkins Loans during the 2015-16 academic year will continue to be eligible to receive Perkins disbursements until they graduate, no new borrowers for the fall 2016 semester will be eligible to receive a Perkins loan. Therefore, it is imperative that Congress take action to extend the Perkins Loan program as soon as possible in order to allow future college students to participate in this successful and sustainable program.

There are three chief problems facing the Perkins program: cost, policy, and legislative vehicle.

Cost: Extending Perkins for one year will cost an estimated $560 million. The current budgetary climate makes finding an offset a politically perilous situation.

Policy: The idea of a federal student aid portfolio consisting of “one grant, one loan” is gaining political popularity; and extending the Perkins Loan program would be viewed by many as running counter to that goal.

Legislative vehicle: If Congress maintains that it does not need to take action to temporarily extend the entire HEA law, it means that any extension of the Perkins Loan program would have to be accomplished through standalone legislation, and not as part of a broader temporary HEA extension.

NAICU continues to partner will allies on Capitol Hill and in the higher education community to find solutions to the Perkins Loan extension problem.

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