Key Federal Issues for Key Federal Issues for Independent College Independent College

Presidents Presidents

Appalachian College AssociationAppalachian College Association

Asheville, NC Asheville, NC

June 14, 2011June 14, 2011

Budget CuttingBudget Cutting

Balanced Budget Amendment proposalsBalanced Budget Amendment proposals

Bipartisan Fiscal CommissionsBipartisan Fiscal Commissions

Debt Ceiling bill will carry cutsDebt Ceiling bill will carry cuts

Global CapsGlobal Caps

Focus on Discretionary SpendingFocus on Discretionary Spending

Budget Big Picture: Budget Big Picture: President’s FY 2012 OutlaysPresident’s FY 2012 Outlays

$ 0.242 T 7%

$1.34 T36%

$ 2.14 T 57%

Discretionary

Mandatory

Interest

$3.7 Trillion in Total Spending

Budget Big Picture: SlicedBudget Big Picture: Sliced(FY 2012 Budget Request, in Billions)(FY 2012 Budget Request, in Billions)

761, 21%

242, 6%

612, 16%

269, 7%

485, 13%

884, 25%

456, 12%

Security

Non-Security

Social Security

Medicare

Medicaid

Other

TARP

Interest

Disaster

Budget Big Picture: Diced Budget Big Picture: Diced (FY 2012 Budget Request, in Billions)(FY 2012 Budget Request, in Billions)

$77.4 2%

SecurityNon-SecuritySocial Security

MedicareMedicaidOtherTARPInterest

DisasterEducation

Budget CuttingBudget Cutting

Pell Grant Funding ($ in billions)

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

U. S. Department of Education

FY11 not enacted; FY12 proposed

Budget Cutting:Budget Cutting:Pell Grant OptionsPell Grant Options

Need $11 billion more to keep $5,550 Pell maxNeed $11 billion more to keep $5,550 Pell max Year Round Pell already eliminatedYear Round Pell already eliminated

OptionsOptions Cut the maximum grant by $2,000Cut the maximum grant by $2,000 Eliminate less than half-time studentsEliminate less than half-time students Eliminate ATBEliminate ATB Eliminate living allowances for 100% on-lineEliminate living allowances for 100% on-line Reduce total years from 9, to 5 or 6Reduce total years from 9, to 5 or 6 Lower Pell max for early years, or after 4 yearsLower Pell max for early years, or after 4 years Lower Pell for 12 credits v. 15 creditsLower Pell for 12 credits v. 15 credits Living/ asset allowances to pre-2007 systemLiving/ asset allowances to pre-2007 system Maximum income capMaximum income cap Raise minimum awardRaise minimum award Eliminate In-school interest subsidyEliminate In-school interest subsidy

Fraud and Abuse RegulationsFraud and Abuse Regulations

Credit Hour Credit Hour

State Authorization, including Distance EdState Authorization, including Distance Ed

Incentive Comp Incentive Comp

Misrepresentation Misrepresentation

High School VerificationHigh School Verification

Gainful EmploymentGainful Employment

Other RegulationsOther Regulations

IPEDS reporting changesIPEDS reporting changes

Net Price CalculatorsNet Price Calculators

College Cost Watch ListsCollege Cost Watch Lists

FERPAFERPA

Tax Tax

Higher Ed expiring provisionsHigher Ed expiring provisions IRA Charitable RolloverIRA Charitable Rollover Tuition DeductionTuition Deduction

December 31, 2011December 31, 2011 AOTCAOTC Section 127Section 127 Student Loan Interest DeductionStudent Loan Interest Deduction Coverdell ESAsCoverdell ESAs

December 31, 2012December 31, 2012

No one wants to increase taxesNo one wants to increase taxesAction later this yearAction later this year

For-ProfitsFor-Profits

Sen. Harkin hearings and findingsSen. Harkin hearings and findingsHeavy lobbying by for-profitsHeavy lobbying by for-profitsStudent Aid:Student Aid: What we know about for-profit education What we know about for-profit education Consequences if fraud issues aren’t Consequences if fraud issues aren’t

addressedaddressed What if government over-regulates?What if government over-regulates?

AccreditationAccreditation

Being deputized as a federal agent?Being deputized as a federal agent? To determine student learning outcomes? To determine student learning outcomes?

(new credit hour definition)(new credit hour definition) To police for-profit institutions?To police for-profit institutions?

State-Federal ConvergenceState-Federal Convergence

K-12 reform becoming P-L reform – with K-12 reform becoming P-L reform – with national standards at state level national standards at state level

State authorization regs have set off new State authorization regs have set off new conversationconversation

Federal/state budget cuts affecting all Federal/state budget cuts affecting all

Teacher PreparationTeacher Preparation

College Completion: 2020College Completion: 2020

Goal is positive and widely endorsed as an Goal is positive and widely endorsed as an important national conversationimportant national conversation

Obama administration manifestation risky Obama administration manifestation risky for higher edfor higher ed Sector focus (community colleges)Sector focus (community colleges) State-based benchmarks, reform modelState-based benchmarks, reform model

Building Blocks to 2020Building Blocks to 2020

Financial Responsibility Financial Responsibility StandardsStandards

New NAICU Task Force New NAICU Task Force – Kent Chabotar, Chair– Kent Chabotar, Chair

Encompasses:Encompasses: Policy IssuesPolicy Issues PR IssuesPR Issues Political IssuesPolitical Issues

Key Federal Issues for Key Federal Issues for Independent College Independent College

Presidents Presidents