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Blessings and Blemishes in Proposed Bill

Legislators work out HEA renewal details and aim--again--for the final wrap-up.
University Business, Oct 2005

Sometime this fall, Congress might renew the Higher Education Act (HEA). Then again, it might not.

Although Congress undoubtedly will reauthorize the HEA at some point, the timetable for action and what the legislation will finally look like were unclear as lawmakers reconvened after Labor Day following their traditional late-summer recess.

The Senate Health, Education, Labor and Pensions Committee quickly approved its version of the reauthorization measure (S 1614) just two days after it was introduced by the committee chair, Sen. Michael B. Enzi (R-Wyo.), and the ranking Democrat, Sen. Edward M. Kennedy (Mass.). Meanwhile, an HEA bill (H.R. 609) approved before the recess by the House Education and Workforce Committee was headed to the floor for consideration by the full House. A joint conference committee will have to work out the differences for final approval by both houses.

Leaders of both committees hail their bills. "We're providing meaningful reforms that will expand college access, prioritize the needs of students, and protect American taxpayers," says Rep. John Boehner (R-Ohio), House committee chairman. He cites elements of the measure that would strengthen Pell Grants, student aid, student access to higher education, and minority-serving institutions; reduce loan costs, fees, and red tape for students and graduates; remove barriers for non-traditional students; and empower consumers through transparency and accountability.

Enzi says the Senate bill helps to provide "seamless lifelong education opportunities" that will work to boost America's global competitiveness.

As adopted, the House bill contains provisions that are "vastly improved" from the original version of the legislation, according to the American Council on Education (ACE), which is trying to lead and coordinate the reauthorization positioning of the numerous other associations in Washington that represent various segments of the higher ed community, each with its own special interests.

In a letter to Enzi and Kennedy, ACE and 16 other higher ed associations also commended the Senators but made clear that they're concerned about several provisions of their measure, including reporting requirements, transfer of credit, accountability for federal funds, and an international education aspect.

Earlier, commenting on the House bill, ACE President David Ward cited "the many new reporting requirements--especially those related to college costs--that will create a large and costly administrative burden." Even more importantly, Ward says, "we are greatly troubled that some of the provisions affecting the terms and conditions of student loans will make the program less generous for future borrowers than it is at present."

While all the major higher ed associations would like to modify the measures, it is questionable whether the constituents can agree, says Ward, on "a simple list of provisions we want to change."

Further, he notes, the coming together of reauthorization with cuts in entitlement spending means that "our desire to address the serious problems in the student loan program will run headlong into the lack of money that confronts Congress." While higher ed lobbyists can attempt to convince Congress to spend more money on student aid, "we have not had much success in those efforts in the recent past," Ward says.

ACE and the other higher education associations continue to work with House and Senate members to improve both of the bills. In addition, they are concerned about how the measures will fit into the legislative process.

As Ward wrote to other association presidents, there was some thinking that the House HEA reauthorization would be added to a budget reconciliation bill that the full House had to consider by mid-September. Other evidence suggested that the HEA bill might not get to the House floor until October, to be considered alone, as a separate piece of legislation.

When and how the full House considers the legislation has important implications, says Ward. A freestanding reauthorization bill would be subject to amendment while a budget reconciliation bill would offer fewer opportunities to make changes. Meanwhile, the plan for Senate action on its bill also was unclear.

Tax-Exemption, Anyone?

Some of the provisions affecting the terms and
conditions of student loans will make them less generous
for future borrowers. -David Ward, American Council on Education

While Senators and Congressmen were in their home states and districts for the August recess, ACE and the National Association of College and University Business Officers (NACUBO) urged institutions to contact lawmakers on another issue: the impact of tax-exempt reform proposals on their institutions. According to the two associations, the legislative proposals could increase costs and reduce revenue for institutions and affect their relationships with students, families, donors, and employees.

The Senate Finance and House Ways and Means Committees held hearings earlier this year on legislation to correct perceived problems and shortfalls in the operation of certain tax-exempt organizations. Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, has said he wants to enact reform legislation this year.

ACE and NACUBO say the anticipated federal revenues from selected reforms could be used to offset the federal revenue loss associated with legislation to expand charitable giving tax incentives, which is a priority for the Bush administration.

Alan Dessoff is a former reporter for The Washington Post and a freelance writer based in Bethesda, Md.

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