• November 26, 2014

5 Key Areas of the Senate Democrats’ Bill to Renew the Higher Education Act

5 Key Areas of the Senate Democrats’ Bill to Renew the Higher Education Act 1

Chip Somodevilla, Getty Images

Sen. Tom Harkin of Iowa, the bill’s sponsor and chairman of the Senate education committee, said he wanted to add provisions to reform accreditation, simplify the student-aid system, and create a unit-record system for tracking students. As a result, the 785-page legislation is likely to grow larger.

Enlarge Image
close 5 Key Areas of the Senate Democrats’ Bill to Renew the Higher Education Act 1

Chip Somodevilla, Getty Images

Sen. Tom Harkin of Iowa, the bill’s sponsor and chairman of the Senate education committee, said he wanted to add provisions to reform accreditation, simplify the student-aid system, and create a unit-record system for tracking students. As a result, the 785-page legislation is likely to grow larger.

Senate Democrats formally unveiled on Wednesday their plan to reauthorize the Higher Education Act, introducing a 785-page bill that aims to make college more affordable, programs more accountable, and student debt more manageable.

The sweeping measure won’t get far in the Republican-led U.S. House of Representatives, where lawmakers have laid out very different priorities for reauthorization of the law. But the legislation reveals what the Democrats will push for in negotiations with Republicans, once both chambers pass a bill.

The huge bill is likely to grow further. Sen. Tom Harkin of Iowa, the bill's sponsor and chairman of the Senate education committee, said he wanted to add provisions to reform accreditation, simplify the student-aid system, and create a unit-record system for tracking students. The unit-record proposal was in an earlier draft of the measure but was stripped for technical reasons.

Here are some of the measure's highlights in five key areas:

Student-Aid Eligibility

  • Revive year-round Pell Grants, with some modifications.
  • Restore eligibility for some students without high-school diplomas or GEDs.
  • Allow students to use two-year-old tax data when applying for financial aid.
  • Reduce the "work penalty" by shielding more earnings from the federal needs-analysis formula.
  • Provide grants to states to aid "Dreamers," students who were brought to the United States illegally as children.

For-Profit Colleges

  • Limit the amount of money that for-profit colleges can receive from the federal government to 85 percent of their revenue, down from 90 percent.
  • Count military tuition-assistance and veterans benefits, not just federal financial aid, toward the 85-percent limit.
  • Ban the use of federal funds for marketing and recruiting.
  • Create an interagency committee to coordinate federal oversight of for-profit colleges.
  • Require the committee to publish "warning lists" of for-profit institutions for parents and prospective students.

Consumer Information

  • Require colleges to use the Education Department’s standardized financial-aid-award letter.
  • Set minimum standards for colleges’ net-price calculators.
  • Create a universal net-price calculator that would allow students to compare costs across colleges.
  • Update the Education Department’s College Scorecard with disaggregated information on colleges’ net prices and student-loan borrowing and repayment rates.
  • Require the education secretary to publish cohort default rates for borrowers of Graduate and Parent PLUS loans.

Student and Borrower Protections

  • Establish a centralized system to track student complaints at the Department of Education and set timelines for responding to complaints.
  • Extend many of the restrictions on agreements between colleges and lenders to providers of debit cards and other financial products.
  • Limit collection costs on defaulted student loans and define what constitutes reasonable payments for borrowers rehabilitating such loans.
  • Create an index of student-default risk based on loan-repayment rates at individual colleges.
  • Require annual federal program reviews of institutions with high default rates or large numbers of student complaints.

Loan Repayment

  • Replace the menu of income-based repayment options with a single plan.
  • Allow students to discharge private student loans in bankruptcy.
  • Make it easier for disabled borrowers to discharge their student loans.
  • Make it easier for members of the military and veterans to obtain interest-rate reductions, loan deferments, and other borrower benefits.
  • Provide loan forgiveness for American Indian educators.

Correction (6/26/2014, 12:16 p.m.): This article originally misstated a provision of the bill. It would allow students to discharge private student loans in bankruptcy; it would not allow them to refinance private student loans. The article has been updated to reflect this correction.

subscribe today

Get the insight you need for success in academe.