© 2014 NASFAA Reauthorization of the Higher Education Act Jesse O’Connell– Asst. Director for Federal Relations NASFAA 1 The National Association of Student Financial Aid Administrators

© 2014 NASFAA2 Reauthorization of Higher Education Act Law mandates reauthorization every 5-7 years –Higher Education Opportunity Act in 2008 Reauthorization should occur in 2014 –Not likely –The process has started, but there will not be a final bill Predictions on timing –An automatic one-year extension was granted at the end of 2014 –Initial legislation has been released in both House and Senate, but markups are unlikely –New Congress could mean new movement

© 2014 NASFAA3 NASFAA’s Reauthorization Task Force Began work in January 2012 Consisted of 17 members from all sectors and regions Forty listening sessions around the country

© 2014 NASFAA4 Member Comments Needs analysis – 23% Loans – 24% R2T4 – 9% Pell – 6%

© 2014 NASFAA5 NASFAA’s Reauthorization Task Force Developed 60 comprehensive recommendations approved by the NASFAA Board Recommendations submitted to both the House and Senate Education Committees in the fall of 2013 Document will continues to be updated, and supplemented, as the timetable for reauthorization is fluid

© 2014 NASFAA6 RTF Spin-off Task Forces Public Service Loan Forgiveness Task Force: Report – Jul Key recommendations to strengthen the PSLF program –Forgiveness limits: 100% up to $57,500 and 50% of remainder up to $138,500 total forgiveness –Keep untaxed –Increase awareness –Make data public

© 2014 NASFAA7 RTF Spin-off Task Forces Consumer Information Task Force: Report – Aug Key recommendations to improve consumer information –Eliminate annual notice and use College Navigator –Repeal student unit record ban –Examine usefulness of campus safety and fire safety reports, etc. –Eliminate non Title IV-related disclosures (e.g., Constitution Day, voter registration, etc. –Exempt graduate programs from inapplicable requirements –Require consumer testing for all new consumer information requirements

© 2014 NASFAA8 RTF Spin-off Task Forces Campus-Based Formula Task Force: Report – Aug Four recommendations to modify the campus-based aid allocation formula –Reconstruct income bands to more accurate reflect student need –Eliminate the base guarantee with phase-in protection –Restructure FSEOG fair share formula to be based on Pell funding received by institution with phase-in protection –Increase the assumed self-help for undergraduates in FWS and Perkins fair share formulas from 25% to 35% with phase-in protection

© 2014 NASFAA9 RTF Spin-off Task Forces Servicing Issues Task Force: Report – Feb Focus area: Information and Communication –Develop a central loan portal where students can manage all of their loans –Remove servicer branding from communication with borrowers –The Department of Education should provide standard consumer protections that are in line with other consumer financial products –The Department of Education should permit the use of innovative technologies in order to allow servicers to more efficiently and effectively communicate with borrowers –The regulatory requirements of entrance and exit counseling should be incorporated into ED’s Financial Awareness Counseling Tool (FACT) Focus area: Standardization –The Department of Education should develop a policies and procedures manual for servicing

© 2014 NASFAA10 RTF Spin-off Task Forces Task forces currently working: R2T4 Competency-Based Education

© 2014 NASFAA11 Higher Education Affordability Act Senate Democrats’ first draft of reauthorization bill HEAA discussion draft introduced on June 25 th Key provisions: –PPY –Year-round Pell –Eliminates student loan origination fees –Early notification of potential financial aid packages –Streamline repayment programs: a 10-yr plan, and an income-based plan –Borrowers more than 150 days delinquent auto-enrolled in IBR –Full school certification of private loans –Private student loans can be discharged in bankruptcy

© 2014 NASFAA12 FAST Act: Sens. Alexander & Bennet Bipartisan Financial Aid Simplification &Transparency Act Previewed last year; officially introduced in 114 th Congress Eliminates the FAFSA –Only asks for a student’s family size and adjusted gross income from two years prior Implements a one grant/one loan system Streamlines the repayment process into two programs: –A standard 10-year repayment and an income-based repayment Introduces a “look-up” table that uses family size and PPY to find the Pell Grant award amount –Provides early information to students and families Institutional authority to limit loans

© 2014 NASFAA13 House GOP Reauthorization Released four bills: –Simplifying the Application for Student Aid Act –Empowering Students Through Enhanced Financial Counseling Act (Passed) –Strengthening Transparency in Higher Education Act (Passed) –Advancing Competency Based Education Demonstration Project Act (Passed) These bills begin to address the committee’s four guiding principles: –Empowering students and families to make informed decisions –Simplifying and improving student aid –Promoting innovation, access, and completion –Ensuring strong accountability and a limited federal role

© 2014 NASFAA14 House GOP Reauthorization Simplifying the Application for Student Aid Act –Mandates the use of PPY income in federal need analysis –Not yet marked up Strengthening Transparency in Higher Education Act –Replaces College Navigator with a new site called College Dashboard –ED would maintain the site, and it would have institutional level information related to basic facts about an institution, such as: sector, web address, enrollment, completion, costs, financial aid, and cohort default rates –Passed the full House

© 2014 NASFAA15 House GOP Reauthorization Empowering Students Through Enhanced Financial Counseling Act Replaces one-time entrance counseling requirement with annual counseling that must be completed before student accepts the loan Passive confirmation of loans would no longer be allowed Exit counseling is expanded to include borrower-specific information Calls for annual counseling of Pell recipients ED required to offer consumer-tested, on-line counseling Requires Parent PLUS counseling Passed the full House

© 2014 NASFAA16 Other Reauthorization Marker Bills What is a marker bill? –Legislation that gets introduced to promote an idea or set of ideas, but without the intent of immediate Congressional action Marker bills in the last Congress: –Pell Grant Protection Act (Sen. Hirono) –Student Loan Borrower Bill of Rights (Sen. Durbin) –Bank on Students Emergency Loan Refinancing Act (Sen. Warren) –CHANCE Act (Sen. Landrieu) –Simplifying Financial Aid for Students Act (Sen. Booker) –College Affordability & Innovation Act (Sens. Murphy & Schatz) It’s clear that Congress is interested in student aid issues

© 2014 NASFAA17 More Reauthorization Marker Bills Marker bills in this Congress: –Eliminating the Hidden Student Loan Tax Act, Rep. Davis (D-CA)  Ends origination fees –Repay Act, Sen. Burr (R-NC) and Sen. King (I-ME)  Streamline repayment plans into one 10-yr standard plan and one simplified income-driven plan –Bank on Students Emergency Loan Refinancing Act, Rep. Courtney (D-CT)  Warren bill from last Congress –HR 529  Expands and strengthens 529 plans, include computers and software as qualifying educational expenses (passed full House) It’s clear that Congress is interested in student aid issues

© 2014 NASFAA18 What’s Next? More hearings –Strengthening the Higher Education System (3/17) –NASFAA witness Overall timeline? Major themes? –Innovative Learning Models –Affordability –Access

© 2014 NASFAA19 Questions?

© 2014 NASFAA20