Higher Education Act reauthorization

Public scrutiny of higher education drives many HEA proposals

EAB's quick take

The current Congress has made little progress on HEA reauthorization and is unlikely to renew the law until after the 2016 elections. When the law is reauthorized, institutions can expect consumer-oriented changes including a simpler financial aid application, new institutional loan accountability measures, stronger campus safety and sexual assault regulations, and improved reporting of outcomes data.

While these measures could benefit students and families, many would put financial and regulatory pressures on institutions.

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Top congressional priorities for reauthorization

1. Easier access to financial aid for students, but potential cuts to financial aid programs
Although the recent decision by the Department of Education has preempted congressional action by authorizing the use of prior-prior year income data and changing the earliest FAFSA filing date, even more is expected during the HEA reauthorization process. Policymakers have recommended eliminating more than 30 questions on the FAFSA.

Congress simultaneously appears likely to limit aid funding. The Perkins loan program briefly expired in 2015 and was revived only with tightened eligibility requirements and a plan to phase it out by 2018. Recent GOP budget proposals have also recommended freezing maximum Pell awards at their current levels for the next decade.

More Students Could Be Fighting for Fewer Dollars

More Students Could Be Fighting for Fewer Dollars

2. Making institutions accountable for loan default
With debt levels rising, lawmakers have debated accountability mechanisms for institutions with high default rates in HEA reauthorization. Early in 2015, the Senate released a white paper on “skin-in-the-game” measures shifting risk for student debt to institutions. Proposals from the Senate report included:

For-Profit Institutions Most at Risk Under Accountability Proposals
  • Fines for institutions with default rates above 15% or the national cohort default rate (currently 13.7%)
  • Institutions guarantee a share of students’ loans that decreases for each year the student progresses
  • Institutions pay into an insurance fund each year with premiums based on risk factors like borrowing rates, completions, and cohort default rates

3. Stringent measures to improve campus safety, address sexual assault
Lawmakers have debated campus climate surveys and crime reporting requirements that would provide institutions and the public more information about campus safety. Compliance with these measures and other safety standards may be tied to Title IV eligibility and fines of up to 1% of an institution’s operating budget. The proposal with the most support is the Campus Accountability and Safety Act (CASA), proposed by a bipartisan group of 34 Senators.

CASA Brings Implementation Challenges, Steep Potential Financial Penalties

CASA Brings Implementation Challenges, Steep Potential Financial Penalties

4. Collecting useful, usable data for policymakers and consumers
Senate lawmakers have studied current data collection policies in an effort to reduce administrative burdens on institutions and emphasize the collection of data most likely to be useful for consumers (i.e., student finance, safety, and success). Proposed policies would improve data on workforce outcomes and completions for part-time, transfer, and returning students and include guidelines to make information more accessible for consumers, such as disclosure pages on institutional websites or a universal net price calculator.

Negative Perceptions, Perverse Consequences May Accompany Focus on Outcomes Data

Negative Perceptions, Perverse Consequences May Accompany Focus on Outcomes Data

5. Accreditation process opened for alternative providers, tightened for traditional institutions

Lawmakers are likely to take up accreditation pathways for non-institutional providers (e.g., CBE, MOOCs, boot camps) by authorizing an existing accreditor or creating a new national body for alternative providers.

The Senate has also considered changes to the accreditation process more broadly, such as reducing the Department of Education’s role in authorizing accreditors, eliminating the regional structure of accrediting bodies, and linking accreditation to student outcomes.

HEA reauthorization not expected until after 2016 elections

  • The HEA was last reauthorized in 2008. The law expired in 2013 and has run on temporary extensions since.
  • Congress intended to take up HEA following the reauthorization of the Elementary and Secondary Education Act, but delays in the ESEA process pushed HEA reauthorization back several months. The current Congress is unlikely to act on HEA before the November elections.
  • HEA could be reauthorized during the lame duck session following the elections but is more likely to be renewed in 2017 by a new Congress.

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