Washington Update

Congress Prepares for Higher Education Act Reauthorization

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The Higher Education Act is due for reauthorization in 2014. In preparation, the relevant committees in the House and Senate have been conducting hearings on various legislative topics including student financial aid, accreditation and measuring an institution’s success in serving students. Congress is expected to conclude the hearings in early spring and then move on to drafting legislation.

Discussion in both the House and Senate has emphasized the rise of the non-traditional college student. Currently, a minority of college undergraduates are recent high school graduates living on campus. The average college student is 24 years old, attends school part time and has dependents.  

The hearings have focused on several aspects of college affordability, including the need to keep tuition down. There was also considerable discussion of income-based repayment (IBR) of student loans. IBR pegs student debt payments to a percentage of their incomes, but currently only 5% of students choose IBR from among the seven available debt repayment options. Most witnesses called for making IBR the default repayment plan for student loans.

The Federal Pell Grant Program, which provides need-based grants to low-income undergraduate and certain post-baccalaureate students, raised different concerns in the two chambers of Congress. On the House side, representatives expressed a desire to rein in the program, while the Senate focused on simplifying the application process and allowing applicants from families receiving federal or state income-based aid to qualify for Pell grants automatically.

The hearings also touched on burdensome regulations. At one hearing, Sen. Lamar Alexander (R-TN), Ranking Member of the Senate Committee on Health, Education, Labor and Pensions (HELP), asked the witnesses to provide a list of what he called “ankle biters,” regulations that distract universities from their educational mission. State regulations and accreditors also came in for criticism. (See also “Senators Raise Questions About Higher-Ed Accreditation” below.)

One Senate hearing discussed at length how to deal with “non-traditional” institutions, particularly for-profit and online schools that “shop around” for accreditation in order to qualify their students for federal financial aid. Democrats expressed particular concern about holding these types of entities accountable for student learning in light of the fact that many students leave for-profit institutions with debt but no degree.

Poor graduation rates featured in several of the hearings, but there was disagreement on how to measure an institution’s success in educating students. The Department of Education requires that the graduation rate be measured by the percentage of the incoming freshman class that graduates with a degree within six years. Witnesses pointed out that this measure fails to capture all of their graduates because many do not start college as freshmen. Along related lines, academic witnesses universally criticized the Obama Administration’s plan to develop a college value rating system, which would tie student financial aid to a college’s performance.

Congressional Committees also heard testimony about new strategies for assisting students who arrive at college unprepared for college work, a particular problem at community colleges. Some schools are experimenting with combining remediation (tutoring and counseling) with regular course work. Students enrolled solely in remediation classes are less likely to complete degree requirements and more likely than other students to exhaust their Pell Grant eligibility before they can graduate.

The House Education and the Workforce Committee devoted an entire hearing to the effect of the Affordable Care Act (ACA) on both K-12 and higher education. It seems likely that the House will include some provision limiting the applicability of the ACA to educational entities in its draft of the Higher Education Act.
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