Background
and Summary
On June 20, 2007, the Committee on Health
Education, Labor and Pensions (HELP Committee) approved S. 1642, the Higher
Education Amendments of 2007. The legislation would reauthorize the Higher
Education Act of 1965, strengthening many of its provisions and including
new measures to rising college costs and address unethical practices in the
student loan industry. S. 1642 would hold colleges accountable for
rising costs by improving the availability and accuracy of information
available to parents and students. The legislation would also simplify
the financial aid application process for all students, and would reform the
student loan system so that it serves the best interests of students, not
lenders.
Major Provisions
Addressing
Rising College Costs
In order to hold colleges
accountable for rising costs, S. 1642 would:
· Expand the information that the Secretary of the
Department of Education (the “Secretary”) makes available to the public on an
annual basis regarding college costs and academic programs.
· Direct the Bureau of Labor Statistics to work with schools
to develop higher education price indices that accurately reflect annual change
in tuition and fees for undergraduate students attending various types of
institutions; and require the Secretary to report this information annually in
both a national list and in separate lists for each state, broken down by type
of institution.
· Require the Secretary to create a Higher Education
Price Increase Watch List, which would include a ranking of each institution of
higher education whose tuition and fees outpace the applicable price index for
institutions of its type.
· Require the Secretary to work with institutions to
develop model price calculators to help students and families determine the net
price of attending a particular higher education institution.
Reforming
the Student Loan System so that it Serves the Best Interests of Students, Not
Lenders
S. 1642 would implement a number of reporting and disclosure
requirements to prevent lenders and colleges from exploiting the student loan
system to the determent of students. The bill would:
- Require
educational institutions that enter into a loan arrangement with a lender
to disclose the name of the lender in all documentation related to the
loan provided under the arrangement; for purposes of this provision, a
“loan arrangement” is an agreement between a lender and a higher education
institution under which: 1) the lender provides loans to the
institution’s students; 2) the institution recommends or promotes the
loans of the lender; and 3) the lender provides a fee or other benefit to
the institution or its students.
- Require
lenders to provide students with a specific set of disclosures, in
writing, before the lender may provide a student with an educational loan,
including the following:
- Clear
statements of the interest rates of the educational loan being offered;
- Sample
educational loan costs, disaggregated by type, and for each type of loan
being offered, the types of repayment plans that are available;
- Further
information about terms and conditions of each loan;
- Lender
practices in cases of default;
- Possible
benefits of each loan and the percentage of borrowers who received such
benefits in the preceding academic year; and
- Whether
the amount of all loans issued by the lender to the borrower exceeds the
student’s cost of attendance.
·
Require lenders to report annually to
the Secretary any expense paid to an employee of a higher education
institution, such as expense paid for advisory board participation or
professional development sponsored by lenders; the Secretary would be required
to report this information to Congress annually.
·
Require the Secretary to prepare a
report annually on the adequacy of the information provided to students and
their parents about educational loans.
· Require that higher education institutions establish,
enforce and follow a code of conduct regarding student loans; the code of
conduct would:
· Include a revenue sharing prohibition that would
prohibit institutions from receiving anything of value from any lender in
exchange for an advantage sought by the lender to make educational loans to a
student associated with such institution.
· Prohibit an employee of the financial aid office at
an institution from:
1) taking from a
lender a gift or trip worth more than nominal value, except for reasonable
expenses associated with professional development; 2) entering into a
consulting arrangement or other contract to provide services to a lender; and
3) receiving anything of value in exchange for serving on the advisory board,
commission or group established by a lender or group of lenders, except for
reasonable expenses incurred in serving on such a board.
- Impose
the following requirements on institutions of higher education that choose
to maintain a preferred lender list:
- In
establishing a preferred lender list, the institution must clearly and
fully disclose why the institution has included each lender as a
preferred lender, especially with respect to terms and conditions
favorable to the borrower;
- Indicate
that students attending the institution (and the parents of such
students) do not have to borrow from a lender on the preferred lender
list; and
- Establish
a process to ensure that lenders are placed upon the preferred lender
list on the basis of the benefits provided to borrowers, including highly
competitive interest rates, high-quality customer service, or additional
benefits.
Simplifying
the Financial Aid Process for All Students
S. 1642 would reform the Free Application for Financial Aid
(FAFSA) by:
- Immediately creating a new 2-page EZ-FAFSA for
low-income students, and phasing out the current 10-page FAFSA for all
applicants within five years; and
- Facilitating student planning by creating a
pilot program that allows students to receive an aid determination or
estimate in their junior year of high school.
Strengthening
TRIO to Improve Preparation for Higher Education
S. 1642 would:
· Require the Secretary to establish outcome criteria
for measuring the quality and effectiveness of programs under TRIO:
Talent Search, Upward Bound, Student Support Services, Postbaccalaureate
Achievement, and Educational
Opportunity Centers
programs.
· Require the Secretary to measure the program’s
delivery of services and secondary school enrollment and completion, postsecondary
enrollment, academic performance, and completion outcomes for students served
by the TRIO grant programs.
· Require Talent Search programs to provide the following activities:
academic tutoring; assistance in selecting secondary courses and applying
for college; information on and assistance in completing financial aid forms;
guidance to high school drop outs; and services designed to improve student or
parent financial and economic literacy.
· Require Upward Bound programs to provide the
following activities: academic tutoring; assistance in selecting
secondary courses and applying for college; information on and assistance in
completing financial aid forms; guidance to high school drop outs; and services
designed to improve student or parent financial and economic literacy.
· Expand the permissible services component of Upward
Bound to include programs for students with disabilities and those who are
homeless or in foster care, in addition to those with limited English proficiency.
· Require Student Support Services programs to provide
the following services: academic tutoring; assistance in selecting
postsecondary courses, transferring from a 2-year to a 4-year program, or
enrolling in graduate programs; information on and assistance in completing
financial aid forms; and services designed to improve student or parent
financial and economic literacy.
· Require the Secretary to submit a report annually
documenting the outcome data on the TRIO program’s delivery of services,
participating students’ secondary and postsecondary school enrollment and
completion, and academic performance.
Expanding
and Improving the GEAR UP Programs
Changes to the Gaining Early Awareness and
Access to Undergraduate Programs (“GEAR UP”) programs in S. 1642 would
include the following:
· Grantees would be required to carry out the following
activities: provide information on financial aid to the populations they
target; encourage student enrollment in challenging secondary coursework;
support activities designed to lead to students graduating from high school and
enrolling in institutions of higher education; and provide scholarships.
· Grantees would also be permitted to use funds for
tutoring, mentors, outreach, secondary and post-secondary support services,
development or implementation of rigorous secondary curricula, dual enrollment,
college visits, extended school day programs, or scholarships.
· States would be given the option to promote
additional activities, such as technical assistance to middle or secondary
schools, professional development opportunities, strategies to increase
postsecondary enrollment and graduation rates, alignment of secondary and
post-secondary curricula and standards, alternatives to the traditional
secondary school that provide a stronger link between high school and
post-secondary options, drop out recovery programs, and dissemination of best
practices.
Promoting
Innovative Models in Teacher Preparation Programs
S. 1642 would hold higher education institutions accountable
for preparing teachers and promoting strategies to recruit and prepare
qualified individuals. Specifically, the bill would:
· Authorize the Secretary to award competitive grants
which recipients would use to carry out a program for pre-baccalaureate
preparation of teachers, a teaching residency program, or both.
· Require that applications for these grants
incorporate certain components, including the following:
· A needs assessment and a description of the extent to
which the teacher preparation program prepares new teachers;
· An assessment of the resources available to the
eligible partnership; and
· An evaluation plan.
· Require that evaluation plans include objectives and
measure for increasing student achievement, teacher retention, improvements in
pass rates on state certification and licensure, and the percentage of highly
qualified teachers hired.
· Require that all institutions of higher education
that conduct teacher preparation programs and that enroll students receiving
federal assistance must report the progress made towards specific measures.
- Require states that receive these grant funds to
have a procedure in place to identify and assist low-performing teacher
preparation programs.
Legislative History
S. 1642, the Higher Education Amendments of 2007, was
reported out of the HELP Committee on June 20, 2007, by a vote of 20-0.
At the same time it approved S. 1642, the Committee also reported out
related legislation, S. 1762, the Higher Education Access Act,
which would provide $17.3 billion in new financial aid to students paid for
through reforms to the student loan industry. On July 19, 2007, the
Senate approved S. 1762 by a vote of 78-18 as a substitute for the House Bill, H.R. 2669.
Pursuant
to a consent agreement, there will be eight hours of debate on S. 1642
the bill and any amendments thereto, with two hours of the time equally divided
and controlled by Senators Kennedy and Enzi or their designees. The time
on any first degree amendment will be limited to 30 minutes equally divided and
controlled, and there will be an additional 15 minutes equally divided and
controlled for any second degree amendment.
The
only amendments in order other than the committee-reported substitute amendment
are 12 first degree amendments which must be germane to the matter of
S. 1642 or the
committee-reported substitute, with six amendments for each manager and an
additional managers' amendment which has been cleared by the managers and the
Leaders. Second degree amendments are in order and must be relevant to
the first degree amendment to which they are offered.
Possible Amendments
The DPC will publish
information on amendments when it becomes available.
Administration Position
As of the time of
publication, the Bush Administration has not issued a Statement of
Administration Policy regarding this bill.