American Association of Community Colleges Federal Legislative Update David Baime AACC Senior VP for Government Relations & Research

AACC Legislative Update American Jobs Act Budget Control Act/Deficit “Super Committee” FY 12 Funding TAACCCT Grant Program/TAA Reauthorization Department of Education Regulations Committee on Measuring Student Success

American Jobs Act $447 Billion Total Package ▫$253 billion tax credits and cuts ▫$194 billion spending Four Main Sections ▫Tax cuts for small businesses ▫Infrastructure and other spending to encourage hiring ▫Unemployment insurance reform and Pathways Back to Work fund ▫Payroll tax cut

American Jobs Act Community College Modernization Funds ▫House Bill: FAST Act – H.R ▫$30 billion overall for school modernization  $5 billion for community colleges ▫Distributed by ED to states based on relative community college enrollments  Four-year institutions potentially eligible based on students in sub-baccalaureate programs  At least $2.5 million to each state

American Jobs Act CC Modernization Funds, cont’d ▫States have broad discretion to determine methods of intra-state distribution ▫Funds for modernization, renovation or repair of existing facilities  No new construction  Academic facilities  Facilities at four-year institutions must be accessible by students in sub-baccalaureate programs  States to take into account how “green” the project is

American Jobs Act Pathways Back to Work ▫$5 billion fund  $2 billion for subsidized employment for low-income adults  $2 billion for summer and year-round employment for low- income youth  $1 billion for effective work-based employment strategies  Competitive grants to local elected officials and WIBs  Community colleges may partner  Sector-based initiatives, mixed employment and training programs, apprenticeships, etc.

American Jobs Act Other Notable Provisions ▫$35 billion for K-12 and first-responder jobs ▫Unemployment insurance reforms – may involve training

Budget Control Act Enacted Aug. 2, 2011 (P.L ) ▫Federal debt limit raised in stages by $2.1 T ▫Created 10-year discretionary caps ▫Provided $17 B for Pell over next two FYs by eliminating in- school interest subsidies on graduate student loans ▫Requires vote on balanced budget constitutional amendment by 12/31/11 ▫Established Joint Select Committee on Deficit Reduction— “Super Committee”

Budget Control Act ▫Discretionary caps in FYs reduce spending by $890 billion over 10 years ▫For FY 2012 and FY 2013, separate spending caps for security and non-security spending ▫FY 2012 cap = $1.043 T ($7B below FY 2011 but $24 B higher than House FY 2012 budget)

Budget Control Act Student Aid ▫Pell Grant program faced an $11.3 B shortfall for FY 2012 but BCA provided $10 B in FY 2012 and $7 B in FY 2013 to address shortfall ▫Pell Grants still face a shortfall of $1.3 B for FY 2012 ▫Eliminates the in-school interest subsidy for graduate and professional student loans made on or after July 1, 2012 ▫Eliminates repayment incentives on direct loans

Budget Control Act “Super Committee” ▫12-member “Super Committee” charged with producing legislation to reduce deficit by $1.2-$1.5 trillion more over 10 years ▫Any cuts and/or revenue increases on table ▫Oct. 14 – deadline for other committees to submit recommendations ▫Super Committee vote by Nov. 23 ▫Congress must vote by Dec. 23 – no filibuster, no amendments

Budget Control Act ▫If the Super Committee fails to propose at least $1.2 Trillion in deficit reduction or Congress rejects plan, SEQUESTRATION ▫If no deal by Jan. 15, 2012, BCA triggers cuts beginning on Jan. 2, 2013 ▫Triggers automatic spending cuts for each of 9 years (FY )

Budget Control Act ▫Sequestration would trigger $55 B/year in defense cuts and $55 B/year in non-defense, including $38 B in discretionary and $17 B in mandatory programs ▫Several programs are exempt including Medicaid, Social Security, and Pell Grants (for two years) ▫For FY 2013, estimate of 9% across-the-board cuts to education would start in the middle of the school year ▫For FY , will not be across-the-board cuts but further program cuts

FY 2012 Labor-HHS-Education Appropriations FY 2012 Begins October 1, 2011 ▫None of the 12 appropriations bills has been enacted ▫No FY 2012 budget resolution but the Budget Control Act set aggregate appropriations for FY 2012 ▫Congress is working on a continuing resolution (CR) while the appropriations process continues ▫Partisan dispute about offsets for FEMA funding

FY 2012 Labor-HHS-Education Appropriations Senate Marked Up its FY 2012 Labor-HHS-Education Bill on Sept. 20, 2011 ▫Pell Grant maximum preserved at $5,550 despite shortfall ▫$100 Million for the Workforce Innovation Fund ▫$158 billion Labor-HHS-Ed discretionary total due to new budget caps - $308 million below FY 2011 ▫Senate expected to proceed with full committee mark up this afternoon ▫House has postponed its Labor-HHS-Ed appropriations mark up several times; in lieu of separate bill, an omnibus

Trade Adjustment Assistance Act Baucus–Camp Reauthorization Bill ▫Senate considering this week as amendment to another trade bill ▫Compromise bill establishes expanded benefits that fall between ARRA authorization and current law  Service industry eligibility  $575 million for training and other services  Continued authorization of TAACCCT program

TAACCCT Program Grant Announcement Expected Very Soon ▫$500 million for first-year grants must be obligated by Sept. 30 ▫Proposals requesting approximately $3 billion received in first round ▫90% of proposals from community colleges

Department of Education (ED) Regulations Obama Administration Has Displayed Strong Propensity to Regulate Higher Education Regulations Not Always Sensitive to Campus Realities and Student Needs For-Profit Education Primary Target of Regulations; Community Colleges “Collateral Damage”

ED Regulations—Gainful Employment Regulation a Fiasco for Community Colleges— Huge New Compliance Burdens With Little Meaningful Cleaning Up of “Rotten Apples” in For-Profit Sector Muscle of For-Profit Lobbying Manifested Widespread Difficulties in CC Implementation Initial 7/1/11 Disclosures and Initial Reporting 11/1/11 SSA Matches Mark Policy Sea Change

ED Regulations—State Authorization Another Regulation Spurred by For-Profit Abuses Institutions Must Demonstrate Compliance With State Authorization Requirements Wherever They Offer Programs; Huge and Negative Implications for Distance Learning Regulation Thrown Out in Court Private Efforts are Underway to Rationalize and Simplify State Efforts

ED Regulations—Program Integrity, Etc. Three Year Default Rates and Higher CC Defaults are Coming New “Satisfactory Academic Progress” Standards Have Created Problems New Verification Procedures Laborious Low FAFSA Application Rates Still an Issue

Committee on Measuring Student Success Committee Created by Congress in 2008 HEA Amendments to Review and Suggest Changes to Two-Year Graduation Rate Calculation Chaired by Head of CCRC and Nearing Completion of Work ED Will Next Decide How to Implement; IPEDS Route Likeliest Big Opportunity for Community Colleges

Contact Information David Baime ▫ x224,