1. Megan Schneider Assistant Director, Federal Affairs NACUBO
Washington Update
Megan Schneider
Assistant Director, Federal Affairs
NACUBO
FABSAA Annual Conference 2018
Daytona Beach, Florida

2. Policy Priorities
Which policy areas should be a priority for Trump and Congress?
Ahead of the State of the Union, Americans say terrorism, education should be among top White House priorities
There are partisan differences, however, with 61% of Reps saying education should be top priority and 78% of Dems
Pew Research Center January 10-15, 2018
Sources: “Economic issues decline among public’s policy priorities,” Pew Research Center, January 25, 2018.
January 29, |

3. House Caucus Breakdown
Freedom Caucus
Median Republicans
Tuesday Group
Progressive Caucus
Median Democrats
Blue Dog Coalition
Total Republicans*
238
Tuesday Group**
~52
Freedom Caucus**
~36
Total Democrats*
193
Blue Dog Coalition 18
New Democrat Coalition 61
Progressive Caucus 75
Vacancies 4
216 Votes Needed to Pass
Republicans maintain a small enough majority that the Freedom Caucus holds an outsized influence
A majority requires 216 votes (if all members are voting)
Currently, if Dems maintain unity, GOP can only lose 22 votes
*The individual caucuses do not add up to the total number as some House members are in multiple caucuses or no ideological caucus.
**The House Republican caucuses do not publicly release lists of members. Estimates come from news reports.

4. 60 Votes for Supermajority
Republican Senate Factions
Centrists
60 Votes for Supermajority
50 Votes for Majority
Conservatives
Sen. Lisa Murkowski (R-AK)
Sen. Rand Paul (R-KY)
Sen. Susan Collins (R-ME)
Sen. Ted Cruz (R-TX)
Due Process
Sen. Jerry Moran (R-KS)
Sen. John McCain (R-AZ)
Republicans only have a one-vote margin in the Senate and must secure nine votes from Democrats to break filibusters
Sen. Mike Lee (R-UT)
Sen. Jeff Flake (R-AZ)
Sen. Tom Cotton (R-AR)
Sen. Bob Corker (R-TN)
Sources: National Journal Research, 2017.
March 2, | Daniel Stublen

5. ■ Republican held seats (239) ■ Democrat held seats (193)
Cook Political Report Ratings for 2018 House Races
■ Republican held seats (239) ■ Democrat held seats (193)
Democrats must maintain all seats, pick up all lean-D Republican seats and all toss-ups to take back the House
Source: Cook Political Report.

6. ■ Republican held seats (8) ■ Democrat/Independent held seats (26)
Cook Political Report Ratings for 2018 Senate Races
■ Republican held seats (8) ■ Democrat/Independent held seats (26)
Democrats need to gain two seats to control the Senate, but are defending 25 seats, five of which are considered “Toss-Ups”
* Includes independent Angus King (ME) who caucuses with the Democrats
** Includes independent Bernie Sanders (VT) who caucuses with the Democrats
Sources: Cook Political Report, 2017.

7. FY 18 Budget Approps Passed 6 months late (averting ANOTHER shutdown)
And despite a veto threat from the President
No provisions for DACA/immigration BUT great for education and research
$22.5 billion for Pell, increasing the max award by $175 to $6095 (from the surplus)
SEOG/Work Study/TRIO all saw increases
Fix for a data-sharing issued raised by NASFAA that allows, with a student’s authorization, financial aid offices to release FAFSA information to outside entities that need it in order to make financial aid awards. Disclosure of FAFSA data for other purposes remains prohibited.
Public Service Loan Forgiveness (PSLF) program modification for qualifying student loan borrowers for PSLF if they were enrolled in a previously ineligible repayment plan.

8. FY 18 Budget Approps Cont.
Level funding for ENERGY STAR (despite proposed elimination)
Research
Prohibition on changes to F&A rates despite calls for it from the Administration
Department of Agriculture’s National Institute of Food and Agriculture, the Agriculture and Food Research Initiative: $25 million increase from FY17.
Department of Defense, Science & Technology: 6.1 percent increase. 
Department of Energy Office of Science: $868 million increase to $5.39 billion/Advanced Research Projects Agency–Energy (ARPA-E): $47 million increase to $353 million.
NIH: $ billion, a $3 billion increase over the previous year.
The National Endowment for the Humanities (NEH): $153 million, a $3 million increase from FY17.
The National Science Foundation (NSF): $7.767 billion, an increase of $295 million

9. The Future of Perkins
Perkins Extension Act would authorize 2 more years
Co-sponsors: in House and 22 in Senate
Costs estimated at $800 million: Will new higher spending caps open a door?
BUT didn’t pass
Decision for schools
Keep collecting and get back institutional share?
Assign to ED and lose institutional share?
House = 51 Rs 192 Ds Senate 4 Rs 18 Ds

10. Deferred Action for Childhood Arrivals
241,000 DACA recipients are currently enrolled in college
Court injunction has put March 5 deadline on hold but future is uncertain

11. Approximate Active DACA Recipients Whose Registration Expired Between 9/5/2017 and 3/5/2018
Now that the March 5th deadline is largely meaningless, a series of court decisions will decide the fate of DACA
Trump has advised the Department of Homeland Security that DACA recipients are not enforcement priorities unless they are criminals, are involved in criminal activity, or are members of a gang
DATA AS OF SEPTEMBER 4, 2017
Sources: USCIS Office of Performance and Quality, “Approximate active DACA recipients as of September 4, 2017 whose DACA expires between September 5, 2017 and March 5, 2018,” September 4, 2017.

12. “Suggestions” for HEA in the FY19 Budget Request
Elimination of subsidized student loans, “saving” $28.5 billion over 10 years
Reformed Federal Work-Study program with funds allocated to schools based in part on enrollment of Pell recipients
Creation of a single income-driven repayment plan
Institutions could then fund employment, internships, or other programs if the placements were career or academically relevant
Elimination of Public Service Loan Forgiveness program
Elimination of the Federal Supplemental Educational Opportunity Grant
1-percent increase for veteran and dependent benefits, including GI Bill educational assistance

13. Status of the House PROSPER Act
Introduced
12/1/17
Passed House Committee 12/12/17
Passed House
Passed Senate
Signed by
president
Passed House Committee on Education and Work along party lines
No hearings, despite higher education community call for more analysis
Democrats support some components like the expansion of Pell grants, but oppose the slashing other aid programs
Democrats oppose the bill
“HEA has always been considered in this committee in a bipartisan way. Unfortunately, [the bill] cannot be considered bipartisan because it chooses clear winners and losers. Under this bill, corporate interests are put first and students are put last.”
— Bobby Scott (D-VA)
Virginia Foxx (R-NC)
Bill sponsor
$15 billion in federal student aid over the next decade would be lost if the PROSPER Act became law, according to a CBO report published Feb. 6, 2018
Brett Guthrie (R-KY)
Bill co-sponsor
Source: House.gov; Danielle Douglas-Gabriel, “CBO estimates show House higher ed bill could hit student loan borrowers hard, Washington Post, Feb. 7, 2018; Education and the Workforce Committee Democrats: Press Releases, Dec. 13, 2017.
February 28, | Taryn MacKinney

14. Sen. Lamar Alexander (R-TN) Sen. Patty Murray (D-WA)
Senate’s Approach to Reauthorization
Multiple hearings
Affordability (2/6)
Accountability and risk (1/30)
Access and innovation (1/25)
Simplification and transparency (1/18)
FAFSA simplification (11/28)
Policy papers
Framework for accountability (R)
Principles to guide reauthorization (D)
Aiming for April markup?
Sen. Lamar Alexander (R-TN)
The Senate has struck a more bipartisan tone than the House over the HEA
Sen. Lamar Alexander (R-TN), chair of the Health, Education, Labor & Pensions Committee, and Sen. Patty Murray (D-WA), its ranking member, have held five committee hearings this year alone on HEA reauthorization. There has been no formal proposal yet, but education advocates are hopeful.
Feb. 1, 2018: Sen. Alexander released a policy white paper that outlines a framework for federal accountability in higher education; shortly after, Senate Democrats issued a sense of
principles they said should guide HEA reauthorization
Feb. 15, 2018: Sen. Alexander said the committee would consider reinstating Pell financial aid grants for incarcerated students in the HEA reauthorization
Apr. 2018: Sen. Alexander has indicated that the committee is aiming for an April markup of a HEA reauthorization bill – an optimistic goal that would allow Sen. Mitch McConnell to bring legislation to the floor relatively early in 2018
Sen. Patty Murray (D-WA)

15. Allows Perkins Loans to sunset
Forces ED to provide initial findings of program reviews within 90 days
Allows Perkins Loans to sunset
Rescinds Obama- era consumer protection regulations
Streamlines repayment plans; eliminates Public Service Loan Forgiveness
PROSPER Act
Repeals SEOG, TEACH grants, FIPSE, and more
FIPSE: Fund for the Improvement of Postsecondary Education
Under One Loan, with borrowing capped for grad students at $28,500/year
Eliminates subsidized loans for undergrads
Expands FWS, revises funding formula, and eliminates graduate student eligibility
Replaces Direct Loan Program with new Federal ONE Loan Program

16. Aid Like a Paycheck
Core Concern Paying students all of their aid in the beginning of a term makes it difficult for them to budget and control spending.
Credit balance refunds would be paid to students in equal monthly or weekly installments
May be unequal to adjust for varying costs, such as upfront charges for tuition and fees
First installment may be paid as early as 30 days before first day of classes
Must be paid no later than 30 days after the start of classes
Details unclear

17. Risk Sharing and Accountability
Core Concern Colleges and universities do not have enough “skin in the game” leaving tax payers to foot the bill for defaulted loans.
Replace cohort default rate with loan repayment rate
Calculated by program of study
Tighten rules on “earned aid” under R2T4 for withdrawn students, so schools bear more of the cost
Require schools to repay ED for some portion of defaulted loans

18. Return of Title IV Funds
Aid earned by quarter of term
School returns unearned aid based on total disbursed, regardless of credit balance refunds
School may only recover 10% of amount returned from student
If student completes at least one modular course in term, not treated as withdrawal

19. In the agencies

20. Administration Still Staffing Up
Department of Education
4 confirmed
6 nominations pending
5 no nomination yet
Undersecretary
Assistant Secretary for Postsecondary Education

21. Do Overs at ED
Title IX Sexual assault Gainful employment Borrower defense to repayment Direct loan servicing
Somewhere in between undoing and redoing

22. State Authorization for Distance Education
Institution offering distance education must:
Be authorized in each state in which it enrolls students if state requires authorization
Document state process for resolving student complaints
Provide disclosures for programs offered solely through distance education
State reciprocity agreements (SARA) (but confusingly…)
Effective July 1, 2018

23. State Authorization for Foreign Locations
Additional location/branch campus outside U.S.
Must be authorized by “appropriate government agency” in host country
If at least half of an educational program is offered, it must be
Approved by institution’s accrediting agency
Reported to the state where the institution’s main campus is located
Effective July 1, 2018

24. myStudentAid Mobile App to Facilitate…
Choosing a school
Understanding aid options
Applying for aid
Receiving aid
Managing loan account
Making payments on loans
Resolving issues
And more…

25. myMoney Solicitation for pilot coming soon Integral “payment vehicle”
No fees to student or school
Available to anyone who completes FAFSA
Functions as bank account, including check writing capability
Schools would load credit balances to account
Funds could come from family or other sources as well
Possible warnings, controls, rewards, etc.

26. Veterans Affairs Veterans Educational Assistance Act
Lifts current 15-year time limit for benefits
Extra year for STEM degrees
Expands eligibility to National Guard
Full eligibility to Purple Heart recipients
Reporting fee increases to $16 per student

27. Cybersecurity
FSA recently sent breach notification and information security reporting compliance letters to some colleges
based on unconfirmed reports of student information data breaches
sent directly to presidents and chancellors
FSA interested in adding an audit objective to evaluate compliance with the Safeguards Rule of the Gramm-Leach-Bliley Act
yet to be officially implemented
EU General Data Protection Regulation

28. Tax Reform
Tax Cuts and Jobs Act of 2017 will have broad impact on colleges and universities
Charitable giving and endowments
How will the changes impact giving?
New endowment excise tax
Treatment of tax-exempt organizations
New executive compensation excise tax
New UBIT rules
BUT forthcoming guidance (JCT Blue Book, IRS regs) will determine extent of impact on higher education

29. Internal Revenue Service
Must report in Box 1 on 1098-Ts for 2018
Still awaiting final rules
Foreign students
Recommendation: Nonresident alien (NRA) students should claim Single-1 on W-4
If the student claims Single-0, then there is over-withholding (student's check could be negative)
Elimination of personal exemptions; NRAs ineligible for standard deduction
Will likely result in a notably higher tax liability for those students from countries that do not have tax treaties in place

30. Megan Schneider mschneider@nacubo.org advocacy@nacubo.org
Questions?
Megan Schneider