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Summer Break

Many legislative issues await action until after Labor Day.
University Business, Aug 2007

WITH MEMBERS OF THE House and Senate scheduled to be away this month on their summer recess, further action on several significant higher education issues awaits the lawmakers' return to work after Labor Day. Issues at various stages of the legislative process include financial aid, accreditation, student lending, technology, and gender discrimination.

One key measure that will be up for a vote in the House would boost college financial aid by about $18 billion over the next five years, including a $500 increase in the maximum Pell Grant, and cut federal subsidies paid to student lenders by $19 billion. Those are the features of the College Cost Reduction Act of 2007 (H.R. 2669), passed in June by the House Education and Labor Committee with a claim by the committee chairman, Rep. George A. Miller (D-Calif.), that it would make the single largest investment in college financial aid since the 1944 GI Bill.

When combined with other Pell scholarship increases already passed or proposed by Congress this year, the maximum Pell Grant, now $4,700, would reach $4,900 next year and $5,200 by 2011, benefiting more than 6 million low- and moderate income students, according to the House committee.

The measure also includes $750 million in federal budget deficit reduction and cuts interest rates on need-based student loans from 6.8 percent to 3.4 percent over the next five years. When fully phased in, that would save the typical student borrower- with $13,800 in need-based student loan debt-more than $4,400 over the life of the loan, according to the House committee. About 6.8 million students take out need-based loans annually.

In addition, the legislation would prevent student loan borrowers from facing unmanageable levels of federal student debt by guaranteeing that they will never have to spend more than 15 percent of their yearly discretionary income on loan repayments and by allowing borrowers in economic hardships to have their loans forgiven after 20 years.

Other provisions of the College Cost Reduction Act provide loan forgiveness for college graduates who enter public service professions, and tuition assistance for excellent undergraduates who agree to teach in the nation's public schools.

"Not only does this legislation meet our promise of making college more affordable, but it does so in a fiscally responsible way, at no new cost to taxpayers," declared Miller in a statement following the committee's passage of the bill. It now goes to the full House for its consideration with the support of a broad coalition of student advocacy groups and labor organizations.

In the Senate, meanwhile, where the Health, Education, Labor and Pensions Committee is moving forward with reauthorization of the Higher Education Act, committee chairman Sen. Edward M. Kennedy (D-Mass.) has asked Education Secretary Margaret Spellings to back off from proposing new regulations on accreditation until the HEA reauthorization is completed.

Based on recommendations in the final report last year of the Spellings Commission on the Future of Higher Education, the Department of Education has conducted a contentious, negotiated rulemaking process to revise the rules on the accreditation process on issues including transfer of credit and new standards for learning outcomes.

In a letter to Spellings, Kennedy said his committee plans to make changes to the section of HEA that deals with accreditation, including clarifying the department's responsibilities with respect to recognizing accreditation agencies and organizations and specifying the criteria they should examine when reviewing higher ed institutions.

"We support your overall goal of ensuring that our accreditation system is an effective means of promoting quality in higher education," Kennedy wrote, although committee members differ on the particulars. However, given the committee's expectation that current accreditation provisions "will soon be changed," followed by rulemaking to implement the changes, "we respectfully ask that you refrain" from proposing new accreditation regulations, Kennedy wrote.

The House Appropriations Committee went even further, with committee chairman Rep. David Obey (D-Wis.) including language in the 2008 education appropriations bill that would effectively block the DOE's eff ort to push through what American Council on Education President David Ward termed "an onerous new set" of accreditation regulations.

Through that action, Obey did higher education "a great service," Ward wrote to presidents of other higher ed associations in Washington, by sharing the education community's concerns about DOE's attempt to "federalize" the accreditation process.

Earlier, Sen. Lamar Alexander (RTenn.) said publicly that he was unhappy with the revisions Spellings wanted to make and indicated he was willing to try to block her moves if necessary. In a statement he put into the Congressional Record on "Accountability in Higher Education," Alexander maintained that DOE was proposing "to restrict autonomy, choice, and competition."

"The question is whether you believe that excellence in higher education comes from institutional autonomy, markets, competition, choice for students, federalism, and limited federal regulation, or whether you don't," Alexander said, making clear that he believes in the former.

The accreditation issue is only one part of the HEA reauthorization move. Congress has kept the act in place through a series of short-term extensions over the past four years, but leaders seem determined to finally re-approve it this year and for a longer period.

As Kennedy's committee also continues its investigation into headline-grabbing disclosures of improprieties in the student loan system, it passed legislation in June to reform the system, including cutting federal subsidies to lending companies by $19 billion.

In a report released a few days earlier on practices in the Federal Family Education Loan (FFEL) program, Kennedy charged that "inappropriate marketing practices, conflicts of interest and back-room deals are found all too frequently" in the student loan industry.

According to the report, some FFEL lenders provided compensation to schools "with the expectation, and in some cases an explicit agreement," that the schools would give lenders preferential treatment, including placement on their preferred lender lists. Other FFEL lenders spent "large sums" on travel and accommodation expenses for meetings of advisory boards comprised of school officials, and they often expected those benefits to yield increased loan volume, or other preferential treatment, at board members' schools.

Further, investigators reported, school officials held financial interests, including stock and options to purchase stock, in FFEL lenders that were on preferred lender lists or were otherwise recommended to students. School officials also received payments for consulting and other services from FFEL lenders.

The report concluded that the student lending issue "is systemic and cannot be isolated to a few 'problem' lenders or schools." Accordingly, declared Kennedy, the findings underscore "the urgent need for systemic reform" in the student loan system as a whole.

As University Business reported last month, legislation already passed by the House-the Student Loan Sunshine Act (H.R. 890)-addresses most of the issues raised by Kennedy's report. But in the legislative process, nothing is final until it is agreed on by both bodies and sent to the president for his signature.

While Kennedy's committee focuses on the public FFEL program, the Senate Banking Committee is looking at the private side of the student loan market, with a call by New York Attorney General Andrew Cuomo at a June hearing for more government scrutiny of the industry. Another witness-Luke Swarthout of the United States Public Interest Research Group-said the private lending industry aggressively markets high-interest, high risk loans to low-income students who often have problems repaying them.

In other continuing developments on Capitol Hill:

- The House Committee on Science and Technology is considering technology used to curtail illegal swapping of music, movies, and other copyrighted files using university networks. At a hearing in June, witnesses from several campuses discussed their experiences with anti-piracy software and bandwidth control. According to ACE, committee members warned that Congress might enact new laws to clamp down on the swapping practice if colleges did not take "more aggressive" steps to do it themselves.

- Witnesses urged the House Subcommittee on Higher Education, Lifelong Learning and Competitiveness to strengthen and enforce regulations under Title IX to fully combat discrimination against women that they say still persists in classrooms, on athletic fields, and elsewhere on campuses. They said significant gains against discrimination have been made in the past 35 years but the Bush administration and Title IX opponents have made repeated efforts to roll back the law's protections. They cited action in 2005 by the Education Department to loosen regulations governing schools' compliance with the law's athletic participation requirements.

- Acting on perhaps the least controversial higher education measure on the Hill, the House passed the Senator Paul Simon Study Abroad Foundation Act (H.R. 1469) to increase the number of U.S. college students who study abroad from about 200,000 currently to one million annually within the next 10 years. A similar bill is pending in the Senate. The legislation is named after the late Sen. Paul Simon (D-Ill.), a strong supporter of international education.

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

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