• August 2, 2014

In Passing 3 Bills, House Panel Takes First Step to Renew Higher Education Act

Members of the U.S. House of Representatives’ education committee took the first step on Thursday toward renewing the nation’s chief higher-education law, approving a trio of bipartisan bills that would promote competency-based education, expand financial counseling for student-loan borrowers, and streamline the information the government provides to prospective students.

The bills, which were approved by voice votes, are part of a piecemeal reauthorization of the Higher Education Act that conflicts with the Senate’s comprehensive approach to the bill. At the start of the committee’s session, its chairman, Rep. John P. Kline Jr., Republican of Minnesota, acknowledged "some skepticism" about the House’s strategy but reminded members that "these are complicated issues."

"A step-by-step approach will better-inform members and the public about the policies we are pursuing," he said. "And just as important, this approach will also allow us to move the ball forward starting now."

During debate on the bills, Democrats offered amendments that would have allowed borrowers to refinance their student-loan debt at current interest rates and would have counted military-based tuition assistance and veterans benefits toward the 90-percent limit on the amount of revenue for-profit colleges may receive from the federal government.

In arguing for the refinancing provision, Rep. George Miller of California, the panel’s top Democrat, said it was "common sense" to give student-loan borrowers the same rights as people with mortgages and car loans. Rep. Susan Davis, also a California Democrat, argued that adding veterans and military benefits to the federal side of the 90/10 formula would protect taxpayers and "prevent for-profits from preying on veterans and their families."

Mr. Kline expressed sympathy for struggling borrowers and said the committee was willing to discuss other ways to make student debt more manageable, but he argued that "the best way to help is to get the economy moving again." He added that the proposed change in the 90/10 rule would restrict veterans’ access to "a host of educational institutions."

"They earned this benefit," he said, "and should be able to use it at the institution that best meets their needs."

Rejected Amendments

Republicans moved to dismiss both amendments as not germane to the underlying bills, and Mr. Kline agreed.

Republican lawmakers also rejected an amendment by Mr. Miller that would have added a loan-repayment rate to the list of disclosures provided to students under one of the bills, the Strengthening Transparency in Higher Education Act (HR 4983).

During debate on the amendment, Mr. Miller argued that applicants "should know whether students are able to pay back their loans," and said that repayment rates can be a proxy for program quality. But Mr. Kline said the addition would undermine the bill’s effort to streamline the information prospective students receive from the federal government, and would be unfair to institutions that serve students who are at greater risk of defaulting.

In addition to simplifying the information provided to students, the bills approved on Thursday would create a demonstration project for competency-based programs (HR 3136) and require borrowers of federal loans to receive annual counseling and to consent to obtaining the loans each year (HR 4984).

The noncontroversial measures now head to the full House, where they are likely to be approved.

In a letter sent to the committee on Wednesday, the American Council on Education praised the bills but expressed concerns about how graduation rates would be calculated under the simplification bill, saying they should be "modified to accurately reflect the diversity of American colleges and universities." The letter also warned that some of the counseling provisions in the financial-literacy bill "might add to complexity rather than reduce it."

Notably missing from the slate of bills approved on Thursday was a measure that would allow applicants to submit family-income data from two years prior to the date they submitted the Free Application for Federal Student Aid, the Fafsa. The bill, which was introduced in June at the same time as the financial-literacy and disclosure measures, was reportedly pulled because of its estimated high cost.

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