HEA Reauthorization and Washington Update Tom Babel Vice President, Regulatory Affairs DeVry Education Group

HEA Reauthorization and Washington Update

Tom BabelVice President, Regulatory Affairs

DeVry Education Group

NASFAA HEA Reauthorization Task Force Recommendations

• http://www.nasfaa.org/reauth/• Task Force– Convened January 2012– 18 members, 5 subcommittees– 37 listening sessions around the country– Recommendations issued July 2013

http://www.nasfaa.org/reauth/

http://www.nasfaa.org/reauth/

• Use Prior Prior Year (PPY) data for EFC• Auto Zero – Eliminate the dislocated worker

criterion as an automatic qualifier for auto-zero

• Strengthen school authority to set living costs in COA based on enrollment status or other factors

NASFAA HEA Reauthorization Need Analysis

• Eliminate independent student status related to homelessness

• Add receipt of SSI, TANF or General Relief benefits as sole qualifiers for an Auto Zero EFC determination

• Eliminate the Simplified Needs Test


• Direct ED to study regional cost of living in Income Protection Allowance (IPA)

• Treat Foreign Income Exclusion as untaxed income

• Add back any business capital, and other losses that do not represent a real loss of income


• Eliminate exclusions for small businesses and farm value from assets

• Expand and refine IRS Data Download to maximize use

• ED and IRS conduct a feasibility study using the 1040 as the primary Federal Student Financial Aid Application


• Direct Secretary to explore ways the IRS-DRT model could be extended to other Federal agencies, States and institutions

• Treatment of unmarried partners or single sex couples

• Definition of “dependent” in family size


• Interest rate: variable, fixed, “stepped”

• Eliminate loan fees

• School authority to limit loan amounts

• Eliminate proration for programs longer than 1 year

• Separate Grad PLUS and parent PLUS

NASFAA HEA Reauthorization Loans

• Annual and aggregate loan limits– Establish one annual subsidized limit by

eliminating differences based on year in school– Increase annual and aggregate loan limits– Step aggregate limits - lower limit applies to

undergraduate students who have not yet successfully completed second year

– Simplify the subsidized/unsubsidized structure


• Allow unequal loan disbursements

• Reinstate ED authority to offer repayment incentives

• Allow late loan origination for 30 days

• Separate refinance option from consolidation


• Continue need-based borrower subsidies• Remove the 150% subsidy limit• Universal loan portal• Standardize loan servicing policies and

procedures• Revisit institutional requirements for

private lender lists


• Require review of current requirements and restrict to undergraduates

• Shift provision of loan disclosures to ED• Decouple Constitution Day, voter

registration, athletic disclosures• Shift requirement to provide State

assistance information to central Federal site

NASFAA HEA Reauthorization Consumer Information

• Limit calculation to undergraduates• Narrow definition of schools required to

take attendance• Subject calculations to institutional

published withdrawal policies• Pro-rata calculation by week

NASFAA HEA Reauthorization R2T4

• Allow FAA discretion, within published policy, on post-withdrawal disbursements

• Account for restricted institutional aid in calculation of institutional charges

• Increase allowable processing time from 45 to 60 days

• Modify order of return


• Direct ED to seek public comment to ease R2T4 burden and complexity; require dedicated negotiated rulemaking

• Require report to Congress on ways to make R2T4 less burdensome, especially for programs offered in modules.


• Increase overaward tolerance and include Direct Lending

• Restore earned credit ability-to-benefit

• Eliminate tie to Selective Service

• Eliminate tie to drug convictions

NASFAA HEA Reauthorization Pell and General Provisions

• Maximize consistency of reinstatement of student eligibility among programs

• Accept data base match for I-9 employment eligibility verification

• Allow payment of currently non-automatic allowable charges unless student opts out


• Make Pell Grant a true entitlement

• Eliminate tie to default rates

• Allow 1 more payment beyond LEU to enable completion

• Year-round Pell


• Increase flexibility on transfers of funds

• Revise distribution of school’s Perkins Fund if program ends

• Expand definition of community service

• Fund community service on separate request


• Eliminate private sector employment cap

• Tie FSEOG eligibility to Pell-eligible EFC range rather than actual receipt, and eliminate lowest EFC order

• Allocation formula remains in development


HEA ReauthorizationSenate Hearings

• 11/14/13

• 10/31/13

• 9/16/13

Ensuring Access to Higher Education: Simplifying Federal Student Aid for Today’s College Student

Attaining a Quality Degree: Innovations to Improve Student Success

The Triad: Promoting a System of Shared Responsibility. Issues for Reauthorization of the Higher Education Act

HEA ReauthorizationHouse – Keeping College Within Reach

• 11/13/13

• 9/18/13

• 9/11/13

• 7/9/13

Simplifying Federal Student Aid

Improving Access and Affordability through Innovative Partnerships

Supporting Higher Education Opportunities for America’s Servicemembers and Veterans

Improving Higher Education through Innovation

• 6/13/13

• 4/24/13

• 4/16/13

• 3/13/13

Discussing Program Quality through Accreditation

Enhancing Transparency for Students, Families and Taxpayers

The Role of Federal Student Aid Programs

Examining Opportunities to Strengthen Federal Student Loan Programs

HEA ReauthorizationHouse – Keeping College Within Reach

Legislation Impacting Higher Ed

• College Cost Reduction and Access Act of 2007– Fixed loan interest rates, public service forgiveness

• Ensuring Continued Access to Student Loans Act of 2008– Increased annual and aggregate Stafford limits, allowed

Parents to defer PLUS payments

• America Recovery and Reinvestment Act of 2009– Increased Pell and Hope Scholarship tax credit

• Health Care and Education Reconciliation Act of 2010– Eliminated FFEL, modified IBR plan

• FY2011 Continuing Resolution– Elimination of year-round Pell, LEAP funding and Byrd

Scholarships

• Budget Control Act of 2011– Elimination of Graduate Subsidized Loan and

Origination Fee Rebate


• Consolidated Appropriations Act, 2012 (2011)– Auto-Zero threshold reduced, Pell cap reduced, Grace

period subsidy suspended, ATB eliminated

• Moving Ahead for Progress in the 21st Century Act (2012)– Limited undergraduate loan subsidy to 150% of

program length

• Sequestration (Budget Control Act of 2011)– Increased loan fees, reduced CBA allocations


What’s Next

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Documents

HEA Reauthorization and Washington Update Tom Babel Vice President, Regulatory Affairs DeVry Education Group