Today, U.S. House Education and Labor Committee Chairman Bobby Scott (D-VA) introduced the College Affordability Act – a comprehensive reauthorization of the Higher Education Act. The College Affordability Act builds on the legislative efforts of last Congress and is the culmination of a series of bipartisan hearings held this year.
The Higher Education Act – or HEA, as it is sometimes called – governs federal higher education policy, including the authorization of federal student aid programs. HEA is now long overdue for reauthorization, which Congress has delayed by keeping the current law in effect. Though there is a strong commitment to passing an HEA reauthorization bill in both chambers of Congress, and on both sides of the political aisle, it is still unclear when HEA might see an update.
Despite bipartisan aspects, it is expected that the College Affordability Act will receive a partisan response. This comes just weeks after Sen. Lamar Alexander (R-TN), Chairman of the Senate Health, Labor, Education, and Pensions (HELP) Committee, introduced a bill of several financial aid-focused proposals, the Student Aid Improvement Act, as a step towards a reauthorization. Sen. Alexander’s proposal has faced opposition for his approach that leaves out several areas of the higher education law.
Kim Cook, executive director of the National College Access Network, said: “NCAN is dedicated to significantly increasing the rates of postsecondary entrance and completion for students of color, students from low-income backgrounds, and other students historically underrepresented in higher education. NCAN reviews this legislation with a central goal in mind: will it help more of our students to access and succeed in higher education?”
So, what impact might this bill have on students?
The bill contains several provisions that intend to improve college access and affordability. Through FAFSA simplification, it will be easier for students to apply for and access federal student aid like the Pell Grant; the bill uses a version of NCAN’s Streamlined FAFSA approach to make the FAFSA shorter and relatively simpler.
By increasing the maximum Pell Grant award, permanently indexing Pell to inflation, and creating a federal-state partnership to make community college tuition-free, the bill would make postsecondary education more affordable for students than it is today.
The bill seeks to simplify and standardize financial aid offers by directing the U.S. Department of Education to develop standard formatting requirements and establish common terms/definitions for all institutions, through a process of consumer testing. This would make it easier for students to compare financial aid offers from prospective institutions. NCAN endorsed this proposal in the FACT Act.
What are additional considerations for this bill?
Though the bill would increase the maximum Pell Grant award by $500, NCAN suggests restoring the purchasing power of the Pell Grant to 50% of the average cost of attendance at a public, bachelor’s-degree-granting institution. In order to reach this target, the maximum Pell Grant must be increased by larger increments before settling into a regularly scheduled inflationary adjustment.
Despite the bill’s efforts to address the disproportionate burden of FAFSA verification for low-income students, NCAN proposes that Congress go farther by placing a finite limit on the number of FAFSAs that individual institutions should be required to verify. The verification melt rate for students from low-income backgrounds has increased in recent years.
The bill proposes a federal-state partnership called America’s College Promise that intends to address college affordability for low-income Americans. This program would provide a pathway for those considering associate degrees, but there are limited options for students from low-income backgrounds who have the goal of pursuing a bachelor’s degree. Students who attend a bachelor’s-degree-granting institution are far more likely to complete their degrees, and thus are more likely to break the intergenerational poverty cycle. While students who transfer from associate-level institutions to bachelor’s- level institutions graduate at higher percentages than the national average, fewer than half of those who intend to transfer actually do. NCAN recommends that students be allowed to use their financial aid at any public institution of higher education.
Below, you will find short summaries of key sections of the bill. (Because the College Affordability Act is a full rewrite of the Higher Education Act, the following is not exhaustive of all sections contained in the bill.)
Pell Grant (Maximum Award and Eligibility)
The bill increases the maximum Pell Grant award by $625 and permanently indexes Pell to inflation. Pell award lifetime eligibility is extended to 14 semesters. Additionally, the bill allows bachelor’s degree recipients who received Pell to exhaust their eligibility on their first post-baccalaureate degree or program.
The bill would also allow for Pell Grant eligibility to be restored for students whose student loans are discharged (or, had they borrowed, would have been discharged) due to institutional closure or fraud, and reinstates the ability for incarcerated individuals to access Pell Grants.
The bill establishes the Job Training Federal Pell Grant Program, which allows students of quality short-term programs (150-600 credit hours over 8-15 weeks) to access the Pell Grant. Students cannot concurrently receive a Pell Grant for other studies and cannot have already attained a post-baccalaureate degree. Participating programs must provide high-skill, in-demand job preparation as part of a pathway to a career and must satisfy applicable educational prerequisites as required for certification or licensure examinations. Programs must provide counseling and information about expected wages and must meet completion and earnings requirements (e.g. subsequent earnings must not be less than the average annual earnings paid to individuals with only a high school diploma or equivalent).
FAFSA Simplification and Need Analysis
This proposal streamlines the FAFSA in several ways. It allows students eligible for means-tested benefits to automatically receive an auto-zero expected family contribution and not have to provide additional financial information. For middle income families that do not file lettered tax schedules, they only need to provide basic financial information that can be obtained from their tax returns. Only earners over $60,000 will have to provide a limited number of asset questions.
Additional changes include increasing the income protection and asset allowances and tying them to inflation and streamlining the foster care/homeless youth questions. Further, the bill removes the selective service question, repeals the prohibition on student aid for those with drug offenses, and makes Dreamers (defined as arriving in the U.S. prior to age 16) eligible for federal student aid.
This bill also addresses FAFSA verification by requiring additional transparency of the U.S. Department of Education.
Financial Aid Offers
The bill would direct the U.S. Department of Education to develop standard requirements, and establish common terms and definitions, for all financial aid offers and communications through a process of consumer testing. Institutions could supplement aid offers with additional, yet non-contradictory, information.
The bill makes changes to the allocation formulas of the need-based Federal Supplemental Educational Opportunity Grant (FSEOG) program and the Federal Work-Study (FWS) program. Currently, allocations are largely based on how long an institution has been a participant in the program. To make them more equitable, the bill would change the existing formulas to better account for the share of low-income students at an institution and the unmet need of students. Both programs see increases in the authorization of appropriations; incrementally over a five-year period, funding for the FSEOG program would increase to ￼$1.75 billion and the FWS program to $2.5 billion.
Additionally, the bill allows eligible public and non-profit institutions participating in the FSEOG program to use funds to provide emergency grant aid to students. Lastly, the bill recreates the Perkins Loan Program as a source of federal student aid by allocating a portion of Direct Loan volume to be distributed to institutions under a new formula.
Federal Student Loans
The bill would eliminate federal student loan origination fees. It would also simplify the federal student loan repayment system by allowing borrowers to choose between one fixed repayment plan and one based on their income. Additionally, the bill would require that borrowers who are more than 120 days delinquent be automatically placed into an income-based repayment plan.
The bill establishes a federal-state partnership (75% federal, 25% state match), America’s College Promise, which would provide federal funding to states that commit to invest more in their public colleges and universities. States apply to receive federal funding in exchange for offering students two years of tuition-free community college. The bill also provides aid to students seeking a bachelor’s degree at Minority Serving Institutions where at least 35% of the student body comes from low-income backgrounds. Pell-eligible students who participate in America’s College Promise would receive “first-dollar” free tuition and be able to use their Pell Grant, state, and institutional aid toward the cost of living.
Funding for Minority-Serving Institutions
The bill would invest in Historically Black Colleges and Universities, Tribal Colleges and Universities, and Minority-Serving Institutions (MSIs) by increasing and permanently reauthorizing mandatory funding for these institutions.
October 16, 2019: This post was updated with summaries of key sections of the bill.
November 4, 2019: This post was updated to reflect changes made through amendments to the bill. The bill was advanced on a party-line vote (28-22) with unanimous Democratic support, and now awaits consideration by the full U.S. House of Representatives.