Higher Educati by the 1

Order Code IB98004 Higher Educati by the 1 Updated October 7, 1998 James B. Stedman, Coordinator Education and Public Welfare Division SUMMARY Introduction HEA Overview Legislative Action in the 105th Congress, Second Session Status of HEA Reauthorization Legislation Major Issues Student Assistance Elementary and Secondary School Teachers Institutional Aid Student Services FORADDITIONAL READWG Contributors: Wayne Riddle, Margot Schenet, and James B. Stedman The Higher Education Act: Reauthorization by the 105th Congress On October 7, 1998, the President signed the Higher Education Amendments of 1998 (H.R. 6) into law. This legislation reauthorizes the Higher Education Act (I-CEA). The conference report for H.R. 6 was approved by the House on September 28, 1998 and by the Senate on September 29, 1998. Among its provisions, the new law: establishes a new formula for interest rates for new student loans (Congress passed H.R. 2400, enacted as P.L. 105-178, with a provision authorizing this new formula temporarily from July 1 through October 1, 1998), e establishes a new performance-based organization to administer federal student aid programs, e amends need analysis procedures to increase working dependent students' and single independent students' eligibility for financial aid, e authorizes new programs to strengthen the quality of the elementary and secondary teaching force, as well as expand loan cancellation for individuals teaching in low-income elementary and secondary schools, and Previously, the House had passed a separate version of legislation to reauthorize the HEA on May 6, 1998. The Senate had passed its original version of this legislation on July 9, 1998. The principal objective of the HEA is to expand postsecondary education opportunity, particularly for low-income individuals, and to increase the affordability of postsecondary education for many moderate income families. The HE& whose programs are administered by the U.S. Department of Education, authorizes the federal government's major student aid programs, as well as other programs aiding institutions and supporting services for disadvantaged students. The HEA Title IV student aid programs are responsible for about $38 billion in grant, loan, or workstudy assistance. authorizes efforts to help disadvantaged elementary and secondary students graduate from high school and enter college. Congressional Research Sewice @ The Lihrarv of Cnn~ress CRS On October 7, 1998, the President signed the Higher Education Amendments of 1998 (H.R. 6) into law. This legslation amends and reauthorizes the Higher Education Act (HEA). The conference report (H.Rept. 105-750) was approved by the House on September 28, I998 and by the Senate on September 29, 1998. Previously, the House passed its original version of H.R. 6 on Mq 6, 1998; the Senate passed its version of the legrslation on July 9, 1998. (Major provisions of the new law are described below in the section on legrslative action in the IO5th Congress.) The Transportation Equity Act for the 2Ist Century JH.R 2400), signed into law on June 9, 1998 (P.L. 105-1 78), includes a provision authorizing a new compromise student loan interest rate formula (as included in H.R. 6 as signed into law; see description below) on a temporay basis from July 1, I998 through October I. 1998. BACKGROUND AND ANALYSIS Introduction The Higher Education Act of 1965 (HEA), as amended, is expiring and is being reauthorized by the 105" Congress. This legislation, whose programs are administered by the U.S. Department of Education (ED), authorizes the federal government's major student aid programs (HEA Title IV), as well as other programs providing institutional aid (primarily HEA Title 111) and suooort services for disadvantaged students (selected HEA Title IV programs). hthough Important support outside i f the HEA flows to postsecondary education institutions through multiple federal agencies for such activities as research and in postsecon~aryeducation is shaped to a significant development, the federal degree by HEA programs. For example, the HEA is the statutory authority for over $38 billion in federally supported student financial assistance (The College Board, Trends in Student Aid: 1987 to 1997, September 1997). This is nearly all of the available federal student aid, and about 68% of all financial aid awarded to postsecondary students. Over time, the various federal income tax benefits enacted in 1997, such as the HOPE Scholarship and the Lifetime Learning tax credit, will come to constitute a significant portion of the total federal aid for students. To place the HEA in context, it is important to consider the magnitude of the postsecondary enterprise. It includes traditional higher education institutions (i.e., public or private, nonprofit 2- and 4-year colleges and universities), as well as other postsecondary institutions (i.e., proprietary or for profit schools offering technical training programs usually of less than 2-years' duration, and public vocational schools). The HEA Title IV student aid programs are open to all types of postsecondary education institutions, while other HEA programs are restricted to traditional higher education institutions. In the 1995-1996 academic year, over 19.4 million students were enrolled in postsecondary education institutions at all levels (U.S. Department of Education, National Postsecondary Student Aid Study, 1995-1996). Of these students, 7 6 million (39%) attended community colleges, 6.8 million (35%) attended public 4-year colleges and universities, 3 6 million (18%) attended private, nonprofit 4-year colleges and universities, and nearly 1 million (5%) attended proprietary institutions. These numbers include undergraduate, graduate, and first professional (e.g., law, medicine, etc.) students. The last two groups are enrolled in public and private universities. This issue brief provides an overview of the I-IEA bridv describing " the current structure of the legislation andthe nature of the programs authohzed. I t then reviews legislative action on reauthorization legislation in the second session of the 105th Congress. HEA Overview The HEA consists of the following titles: a a a a a a a a Title I - Partnerships for Educational Excellence Title I11 -Institutional Aid Title IV - Student Assistance Title V - Educator Recruitment, Retention, and Development Title VI - International Education Programs Title VII - Construction, Reconstruction, and Renovation of Academic Facilities Title VIII - Cooperative Education Title IX - Graduate Programs Title X - Postsecondary Improvement Programs Title XI - Community Service Programs Title XI1 - General Provisions Title I1 - Academic Library and Information Services was repealed in 1996 These titles authorize a broad range of programs; however, many of these programs either have never been funded or are no longer being funded. Major HEA programs are briefly outlined below. The heart of the legislation is its student aid programs authorized under Title IV. These programs seek to expand educational opportunity and support more than $38 billion in student assistance. This cumulative total amount of aid provided includes directly appropriated federal funds, student loan volume in the Federal Family Education Loan and Direct Loan programs, and institutional matching funds required under several of the federal student aid programs. Title IV student aid is provided in the form of grants (which do not have to be repaid), loans, and work-study assistance. The two largest Title IV student aid programs are Pell Grants and Federal Family Education Loans (FFELs). Under both, students receive funds to attend the postsecondary education institutions of their choice. Pell Grants are need-based aid for undergraduate students. These grants aided 3.6 million students with nearly $5.7 billion in the 1996-1997 school year (the number of students supported, and the amount of aid provided, for this and each of the student aid programs described below are from The College Board, Trends in Student Aidj. FFELs are made by private lenders and are available to undergraduate and graduate students, and their parents. Some kinds of FFELs are need-based, others are not. In 1996-1997, over 5.4 million loans for some $20.3 billion were made under this program. A relatively new program -Federal Direct Loans (DLs) - provides the same kinds of loans as the FFEL program, but the loan capital is provided directly by the federal government; participating postsecondary institutions or a contractor act as the loan originator on behalf of the federal government. Some 2.8 million DLs for nearly $9.8 billion were made in 19961997. Three smaller Title IV student aid programs - Federal Supplemental Educational Opportunity Grants (SEOG), Federal Work-Study (FWS), and Federal Perkins Loans - are collectively known as the campus-based programs because their funds are allocated to postsecondary institutions for award to students. Institutions must match a portion of their allocation under each of these programs. Undergraduates can participate in each of these programs, while graduate students are eligible for Work-Study and Perkins Loans. In 19961997, over $580 million in SEOGs went to more than 990,000 students; $760 million in federal funds supported over 700,000 students in the Federal Work-Study program; and slightly more than 700,000 students borrowed about $940 million in Perkins Loans. The HEA's primary programs for student services are the federal TRIO programs, which provide disadvantaged students with support services to help them complete high school, and enter and persist in college The TRIO programs (so called because there were once just three of them) include Talent Search, Upward Bound, Student Support Services, Educational Opportunity Center, McNair Postbaccalaureate, and Staff Training For FY1996, 674,000 individuals participated in the various TRIO programs which received nearly $463 million (the FYI998 appropriation for the TRIO programs is slightly less than $530 million) A related program is the National Early Intervention Scholarship and Partnership (NEISP) program which seeks to increase high school completion and college enrollment by combining academic and social services targeted on low-income youth to enable them to complete high school, with scholarship aid for college enrollment States are awarded funding for this program The primary institutional assistance programs are the Title I11 - Institutional Aid programs, which award grants to higher education institutions to strengthen their academic, administrative, and financial capacities. Separate funding is awarded to historically black colleges and universities and to institutions serving substantial percentages of Hispanic students. Annual funding for Title I11 has been roughly $200 million over the past several years (FYI998 funding is approximately $211 million). Among other institutional aid programs are those offering support for international education, facilities construction and renovation, graduate study, innovation in higher education, and science programs at minority institutions. Legislative Action in the 105th Congress, Second Session This part summarizes the major features of the reauthorization bills upon which the 105th Congress has taken action during its second session. Status of HEA Reauthorization Legislation On October 7, 1998, the President signed the Higher Education Amendments of 1998 (H.R. 6) into law. The conference report (H.Rept. 105-750) was approved by the House on September 28, 1998 (voice vote) and by the Senate on September 29, 1998 (vote of 96-0). The original version of H.R. 6 was approved by the House of Representatives on May 6, 1998 (vote of 414-4). The Senate passed its version of H.R. 6 on July 9, 1998 (vote of 96-I), after having completed action on S. 1882 and inserting its text into H.R. 6 in lieu of the House-passed text of H.R. 6. Major Issues In the discussion of issues below, references to the "House bill" or to the "Senate bill" are to the original House- or Senate-passed versions of H.R. 6. Text in italics describes the content of the new law. H.R. 6 as signed into law addresses several major issues: student assistance, elementary and secondary school teachers; institutional aid; and support services for precollege and college students. For each issue, treatment by the House and Senate bills is described, followed by a description of the new law. In addition to the issues discussed below, the new law includes numerous other provisions involving campus crime reporting requirements, higher education faculty retirement, efforts to reduce drug and alcohol abuse by college students, the education of disabled college students, and a study by the General Accounting Office of the effectiveness of education in helping welfare recipients become employed. The new law reorganizes the HEA, refocusing some titles and deleting others. The agreement also repeals numerous u h n d e d HEA program authorities as well as several authorities for commissions and studies. Student Assistance. Among the student aid issues addressed by the House and Senate bills, the following are considered briefly below: institutional eligibility, student loans, Pel1 Grants, campus-based student aid programs, student aid administration, need analysis, and college costs. Student Loans. The House- and Senate-passed versions of H.R. 6 establish the same new formula for interest rates for new Stafford loans after July 1, 1998: borrowers will pay interest based on a formula of the 91-day Treasury bill + 1.7% while in school, grace or deferment, and the 91-day T-bi+ 2.3% in repayment. P.L. 105-178 authorized this new rate temporarily until October 1, 1998. At the same time, the special allowance paid to lenders is set at a higher rate, to provide them with an additional .5 return, as an incentive to remain in the program. The Senate bill sunsets the new rates on July 1,2003. The House bill also changes consolidation loan interest rates to the weighted average of loans consolidated; the Senate bill keeps current law, which allows lower rates (the same as the Stafford rates) for consolidation loans in the DL program. The new law includes the new lower Stoflord loan rates and higher special allowance. It sets FFEL rates at the weighted average, but maintains current lower consolidation loan rates in the DL p r o p m through Janzravy 31, 1999. After January 31, consolidation loan rates in both programs will be set at the weighted average. The Senate, but not the House bi,provides a new extended repayment option for FFEL borrowers with high loan balances; both bills provide loan forgiveness for a limited group of borrowers entering teaching (see below). Both bills also include a separate loan forgiveness provision for child care providers. The new law includes the new extended repayment option as well as the loan forgiveness provisions. Both bills restructure FFEL guaranty agency k c i n g , preserving current federal reserve funds while recalling additional reserve funds. Both provide guaranty agencies more flexib'ity in the use of future revenues. fie new law reflects the provisions in both bills that reform guaranty agencyfinancing and recalls $250 million in reserves. Pell Gmnts. The Senate bill increases the authorized maximum Pell Grant more than the House bill (actual Pell Grant maximum awards are determined by appropriations; the current authorized maximum is $4,500, the appropriated maximum is $3,000). The House bill increases the level at which the program award rules become sensitive to tuition from $2,400 to $3,000; both bills increase the amount allowed for dependent care or disability expenses under tuition sensitivity. The Senate bill also lowers the minimum Pell Grant award to $200, and sets a time limit on a student's eligib'ity of 150% of the normal time to complete an undergraduate program. - The Senate bill, but not the House bill, authorizes Pell Grant support to students in non-degree postbaccalaureate programs providing courses required for teacher licensing. Such students must be enrolled at institutions not offering baccalaureate degrees in education. Tke new law increases the authorized maximum gvaduailyjkom $4,500 in 1999-2000 to $5,800 in 2003-2004; increases the tuition sensitivity trigger to $2,700 and raises the allowancesfor child care and disability expenses under tuition sensitivity. The Senate 'sprovision allowing additional Pel1 Grant support for future teachers was adopted; however, the povisions on the minimum award and time limits were not included in H. R. 6, as signed into law. * The House bill, but not the Senate bill, includes a separate authorization of appropriations for a new "super-Pell" that would double students' Pell Grant awards for the first 2 years of college if they graduated in the top 10% of their high school class. H.R. 6 as signed into law includes a new program in HEA Title IV, Pavt A that authorizes an award equal to a shrdent S Pell gruntfor thejrst 2 yews of college if they p d u a t e in the top 10% of their high school class. Campus-BusedStudcntAidPvogvams. The House b i , but not the Senate bill, amends the institutional allocation formulas for each of the campus-based programs to reduce the amount of aid awarded on the basis of the historical level of aid received by participating institutions, and increase the amount awarded on the basis of institutional need for assistance. In addition, a minimum share of FWS funds is reserved for reading tutor jobs. The Senate bill would extend these programs without major changes to the allocation formulas. The new law includes a modiped version of the House provision which preserves the historical level of aid institutions receive, but allows nwfindsl, above the FY99 levels, to be allocated solely on the basis of institutional need Provisionsf o ~ the use of FWSfunds for reading tutors are also included Institutional Eligibility. Both bills recognize that distance learning programs may face barriers under current rules. They provide the Secretary with authority to conduct demonstrations to evaluate the impact of such programs on access and the appropriate level of federal support, and to recommend necessary changes to the eligibility provisions. The Senate bii initially limits the number of such demonstrations to 15 degree-granting institutions or consortia, and also specifies that the Western Governors University is to be eligible to participate. The new law includesproviisionsfor distunce lecnning demonstrations that allow title ZV eligrble institutions, systems, or consortia, and Western Governors University, to participate in an initial 15 demonstrations, with an additional 35 to be allowed in the third year. Proprietary institutions are currently required to have 15% of their revenue from nontitle IV sources (the 85-15 rule); the House bill specifies that revenues may include funds received for educational and training programs not eligible for title IV support, thus overturning current regulations on this issue. The House bill makes more changes to the cohort default rate rules than the Senate bill. The House bill adds a definition of exceptional mitigating circumstances that exempts institutions from the default cut-off, it is similar to, but somewhat less stringent than the definition in current regulations. The House bill, but not the Senate bill, also extends the cohort default rule to participation in the Pell Grant program; schools ineligible for participation in FFEL because of high defaults will also be ineligible for participation in the Pell Grant program. Both bills provide an exemption from the cohort default rate rules for schools with few borrowers. The Senate bill, but not the House bill, revises institutional refund policy requirements. As signed into law, H.R. 6 modifies the current 85-15 mle to 90-10; includes a definition of mitigating circumstances in the statute that is similar to current regulations, but reduces the poverty rate and placement rate required; exempts institutions with few borrowers ?om the cohort default rate rules; and, extend the cohort default rules to participation in the Pell Grant prog~um. A modz$ed version of the Senate provision on refundpolicy requirements is also included. The new refund requirements will apply to all studentsfor HEA Title N assistance only. I The House bill also exempts, for one additional year, historically black colleges and universities (HBCUs) and tribal community colleges that had been explicitly exempted from cohort default rules until July 1,1998; after July 1, 1999, such schools that demonstrate progress at reducing their default rates below the cut-off of 25%, may, at the Secretary's discretion, continue to be exempt for a further 2 years only. The Senate bill extends the HBCU and tribal college exemption until 2002, but gives the Secretary discretion to impose a cut-off after 2 years, ifthere is no evidence of progress. The new law ends the HBCUand tribal colleges exemption in 1999, but allowsfirrther exemptions until July 1, 2002, at the Secretmy's discretion, ifinsti~utionsexhibit substantial improvement in their cohort default rates. Administration oj'Student Aid Programs. Both the Senate and House bills would establish a new performance-based organization (PBO) responsible for managing the information processing and delivery systems for the student assistance programs authorized under HEA Title IV. Under both proposals, responsibility for establishing policies affecting the student aid programs would remain with the Secretary of Education, and the PBO would be part of ED. Further, the PBO would be directed by a chief operating officer (COO) with experience or expertise in management, financial services, and/or information technology. Among other responsibilities, the Secretary and the COO would attempt to integrate student aid delivery systems, improve service to students, and reduce administrative costs, while increasing flexibility and accountability. The new law includes these provisions to establish n PBO in ED to improve the administvation and management o f the student aidprograms. NeedAnalysis. The House and Senate bills, and the new law make several changes to the need analysis procedures used to determine what students and their families are expected to contribute (expected family contribution) toward their costs of education These changes are intended to increase the eligibility for federal financial aid, particularly Pell Grants, of working dependent students and independent students without children For working dependent students, the House and Senate bills would amend the HEA to adjust the income protection allowance (IPA) for such students. The HEA as currently written sets it at $1,750, although FYI998 appropriations legislation increased it to $2,200 for 1998-99. The House bill raises the IPA to $3,000, while Senate bill sets it at $2,200 for 1999-2000. Both b i s provide for annual adjustments to the IPA for inflation. Further, both bills include an additional allowance against dependent students' income in cases where parental income is too low to cover living expenses. Finally, only the House bill seeks to reduce disincentives for saving and working by combining student and parental assets, instead of assessing student savings separately. Under the new lmv, the dependent student IPA would be $2,200 for 2000-2001 (the s m e as its 1998-99 level and the level it is assumedwill be set by the appropriationsprocess for 1999-2000). This level will be adjustedfor inflation in subsequent years. The law now includes the additional allowance against student income when parental income is too low to cover living expenses. The House proposal to combine student assets with parental assets was not adopted The IPAs for independent students without children are also adjusted in both bills The HEA presently specifies an IPA of $3,000 for single independent students and for married students without children when both spouses are enrolled, FY1998 appropriations legislation boosted this IPA to $4,250 for 1998-99 For these students, the House bill increases the IPA to $5,500 while the Senate bill sets it at $4,250 for 1999-2000 For married independents with no children when only one spouse is enrolled, the HEA specified level is $6,000, which is raised to $7,250 for 1998-99 by FYI998 appropriations legislation The House bill increases the IPA for these students to $8,500 while the Senate bill maintains the $7,250 level for 1999-2000 Both bills provide for annual adjustments in these IPAs The new law sets plav IPAsfor independent students withart childrenfor the 2000-2001 award year - $5,OOOfor single independent students and for married students without childen when both Touses are enrolled, and $8,000for married students with no children when only one spouse is enrolled These levels will be adjustedfor inflation in subsequent years. It is assumed that the appvopriationsprocess will maintain the 1998-99 IPA levels for 1999-2000. Both bills remove Montgomery GI Bill education benefits from consideration in the determination of students' financial need. Under current law, these and other veterans education benefits are not considered for determining Pell Grant awards but may affect determination of need for other HEA Title IV assistance. The new law specijies thut Montgomevy GI Bill (active duty) education benefits will be excludedfiom consideration in the determination of students 'f i m c i a l need for subsidized student loans. Otherwise, current law treatment of these veterans' education beneJits is contimed The tveahent of education awavdsprovided under the National and Community Service Act of I990 is adjusted fvom current law to conform to the new treatment of Montgomery GI Bill (active duty) education benefits. College Costs. Concern over annual increases in college costs above the rate of inflation prompted the House and Senate to include provisions their bills intended to provide a clearer picture to policymakers, parents, and students of these costs and factors contributing to their increase. Under the House bill, both ED and the General Accounting Office are charged with collecting and reporting information on college costs to assist in analysis of costs and to educate consumers. Similarly, the Senate bill requires the collecting and reporting of college cost data by ED to support informed decisionmaking about college attendance. The Senate bill provides for a fine of up to $25,000 for institutions failing to provide requested cost data. In addition, the Senate bill requires ED to develop a "higher education market basket" to gauge changes in the costs faced by higher education institutions. The new law requires ED to collect and report college cost information. The authority forjnes of instihitiomforfailure to report data is included The Bureau of Labor Statistics is responsiblefor developing the market basket, in consultation with ED. Elementary and Secondary School Teachers. TheHousebiauthorizestheTeacher Quality Enhancement Grants program of competitive matching grants to eligible grant recipients (state governors, unless another individual or entity is responsible for teacher certification and preparation) and to eligible partnerships (which must include exemplary higher education institutions preparing teachers, and LEAs). Eligible grant recipients are to use their funds for certification reform, alternative teacher preparation, institutional accountability for the quality of teacher graduates, effective ways of removing incompetent teachers, and teacher recruitment. Eligible partnerships use their funds for similar activities, as well as professional development and the integration of technology into teaching. To be eligible for this program, exemplary institutions in the partnerships must have at least an 80% pass rate by their teacher education graduates on state teacher assessments; by the second year, all other teacher education programs in the state must have at least a 70% pass rate. LEAs in the program must inform any parent who requests about the qualifications of their children's teachers. Under these competitive grants, one-third of the annual appropriation is to fund partnership applications. When the annual appropriation exceeds $250 million, awards are made by formula to eligible grant recipients who will also make awards to eligible partnerships. The initial authorization is such sums as may be necessary. The Senate bill authorizes three separate programs supporting teacher preparation and recruitment. Teacher Quality Enhancement Grants would be awarded competitively to states. Participating states are to designate the chief individual or entity responsible for supervision of education to administer activities of the program. Authorized activities are similar to those in the House bi. Participating states must report on progress in various areas, including the pass rate on teacher certification exams. As with the House bill, any benefitting school district must provide information on teacher qualifications upon parental request. The Senate bill also authorizes Teacher Training Partnerships Grants for partnerships involving higher education schools of arts and sciences, schools of education, LEAs, and individual schools. They must include high need districts and schools (i.e., serving areas with high levels of poverty, high percentages of out-of-field teachers, or high rates of teacher turnover). Partnerships provide preservice clinical experiences for prospective teachers, reform teacher education curriculum, and prepare teachers to use technology. Partnerships must have evaluation plans with such objectives as increasing the pass rate on teacher certification exams. The initial authorization level for these two programs (Enhancement Grants and Partnership Grants) is $300 million, divided evenly between them. In addition, the Senate bill authorizes a recruitment program (initial authorization of $37 million) for higher education institutions with teacher education programs working in partnership with school districts in underserved areas (relatively high poverty areas). These partnerships provide scholarships with service payback requirements to prospective teachers, as well as support services. The new law consolidates the programs authorized under the House and Senate bills into a single finding authority supporting separate grants to states and to partnerships for teacher improvement activities, and gmnts for teacher recruitment open to states and partnerships. B e initial authorization isfor $300 million; 45% of the annual authorization isfor state gunts, 45% isforpan'nership grants, and 10% isfor recruitment p t s . Under the state grant, the eligible recipient is the state governor, unless another individual or entity is responsiblefor the activities supported under thisprogram. Authorized activitiesfor state grants are similar to those in the House and Senate bills. Partnerships must include a higher education institution with a teacher educationprogram that demonstrates high levels of performance or that requires its students to participate in intensive clinical experience andcertain subject major requirements. Other required and meet high academic st&& members of the partnerships are a school of arts and sciences, and a high need local educational agency. The law identifies certain mandated andpermissive activities, d m n from those in the House and Senate bills. Recruitment funcling supports either service payback scholarships that are coupled with support services and follow-up activities, or activities to enable high need school districts to recruit highly qualzjied teachers. Accoun?ability requirements are imposed on participating states and partnerships. Contimedfinding is conditioned upon prog~essin meeting program purposes, goals, and objectives. LEAS or schools receivingfinds under this program must provide information on teacher qualz$cations to parents who request it. The House and Senate bills include broad accountability requirements regarding the preparation of teachers by higher education institutions. Although they differ in many specific details, both bills require any state receiving funds under the HEA to provide information annually to ED concerning such issues as teacher licensing standards, assessments, and pass rates on such assessments. ED is to publish such information. Higher education institutions that receive federal funds (House b i ) or have teacher preparation programs enrolling students who receive federal assistance (Senate bill) must report widely their pass rates on teacher licensing examinations. The House bill, but not the Senate bill, requires states to identify to the Secretary those HEA-aided institutions having teacher preparation programs with a pass rate of less than 70%. Both bills have similar reauirements that states receivine " HEA funding " must have procedures for identifying low-performing teacher education programs. Further, if an institution's teacher education program - - has lost state ap~rovalor state financial support by virtue of its low performance, that institution ( ~ o ubill) s ~or that teacher program (Senate bill) is ineligible for any professional development funding from ED, and no HEA Title IV-aided students can be accepted to, or enrolled in, the teacher education program. I The new law includes the broad accountability requirements contained in both bills. Institutional reporting requirements are imposed on institutions whose teacher preparation progrms enroll students receivingfederalfinancialassistance. Z4e reporting requirements are similar although states we not required to prepare a separate list of teacherpreparation progrms with pass rates below 70%. States are required to report pass rates in rank order by institution. The consequencesfor teacher education programs that lose state approval or support because of low pevformance are the same as in both underlying bills. Both bills authorize cancellation of subsidized Federal Family Education Loans and Direct Loans for full-time teaching in an eligible low-income public or private nonprofit elementary or secondary school The House version permits cancellation of consolidation loans to the extent such loans were used to repay eligible subsidized loans Under both bills, only amounts borrowed for the first 2 years of undergraduate study can be forgiven The Senate bill allows forgiveness only to new borrowers -the House bill limits it to new loans to borrowers who, as of the date of enactment, do not owe any principal or interest on past loans The House bill requires that borrowers have taught for 2 years before being able to cancel their loans -the Senate b i requires three years of teaching The House bill limits the total amount that can be forgiven to $17,750 -the maximum in the Senate bill is $8,000 The House bill requires secondary school teachers to have majored in the subject areas in which they are teaching - the Senate bill requires that the major be relevant to the teaching subject Both b i s require elementary school teachers to have demonstrated knowledge and teaching skills in elementary subject areas The new law provides cancellation for subsidized and unsubsidized loans, limits the amount that can be forgiven to $5,000, and allows that forgiveness to occur fully immediatelyfollowing the fifth year of eligible teaching. The House b i , but not the Senate bill, prohibits any funds under the HEA or any other act from being awarded to the National Board for Professional Teaching Standards, which is developing a voluntary, national program of teacher certification H.R 6, as signed into law, does not contazn such language. Institutional Aid. The primary institutional aid issues addressed in the new law focus on minority institutions, in particular: Hispanic-serving institutions (HSIs), tribal colleges and universities (TCUs), and HBCUs. The treatment of each of these groups of institutions is considered separately below. The House and Senate bills are described first, followed by a description of the new law. Both bids transfer the authority for assistance to HSIs from HEA Title 111 to a separate title. They also modii the definition of an HSI to require only that at least 25% of hll-time equivalent undergraduate students be Hispanic and that at least 50% of those students be lowincome. Only the House bill amends other HSI eligibility requirements from current law to include proprietary institutions meeting specified criteria. Under both bills, HSIs would be newly authorized to use h d s to address graduate and professional opportunities. The Senate and House bills authorize HSIs to spend 20% of their grants on endowment building. The primmy dzflerence between the new law and the lmguage in either the House or Senate bills is that it does not make any proprietary institutions eligrble for assistance. Both bills authorize assistance under Title 111 to TCUs for activities similar to those authorized for other institutions. The House bill authorizes TCUs to use hnds for endowment building and apparently applies a 20% limitation; the Senate bill specifies that up to 20% can be used for this purpose. The new law authorizes assistance to TCUs and specijes that up to 20% of theirfunds. can be usedfor endowment building. In other amendments affecting institutional aid, the House and Senate bills permit the HBCU graduate and professional institutions currently specified in the title to expand the number of graduates and professional programs they can fund; both bills increase the number of HBCU graduate and professional institutions listed in the title. Both bills would allow undergraduate HBCUs to use up to 20% of their funding for endowment building. Title 111 institutions that do not fall into any of the groups of institutions described above (so-called "Part A" institutions) would also be authorized under both bills to spend up to 20% of their funding on endowment building. The new law rejlects the concurrence between the House and Senate bills on these various issues. The Senate bill, but not the House bdl,adds two additional groups of institutions to Title I11 - Alaska Native-serving institutions and Native Hawaiian-serving institutions - for activities similar to some of those authorized for other Title I1 institutions. The new law adds these two new groups of institutions to Title ZZI. Student Services. The new law modifies and extends current HEA programs that support student services; it adds programs designed to provide such support. Some of the latter are described below. Both bills reauthorize the TRlO programs, making several amendments to authorized activities, including the addition of work-study activities to the Upward Bound program. H.R. 6, as srgned into law, rejects the provisions of the House and Senate bills. The House bill reauthorizes the W I S P program, while the Senate bill modifies the program, renaming it the Connections program, and incorporates into it some features of the High Hopes for College program included in the House bill. The High Hopes for College program (the House bill) would authorize competitive, matching grants to college-schoolcommunity partnerships. Cohorts of students (an entire grade level at a participating lowincome school) would receive, throughout their precollege education, various support services such as academic counseling, activities to foster career awareness, tutoring, and mentoring. In addition, partnerships would seek to improve parents' involvement in preparing their children for postsecondary education. Participating students would receive 21st Century Scholar Certificates indicating the amount of federal financial aid for college that the students may be eligible to receive when they attend college. The new law authorizes Gaining Early Awmeness and Redness for UndergruduutePrograms (GEAR UP). Thisprogram rejects a combimtion of the NEISPprogrm and the Hmse bill's High Hopesfor College program. The state-basedfeatures of NEISP me continued with states eligible to receive at least 33% of GEAR UP annualfinding. Partnerships to serve cohorts of students are eligble for at least 33% of the annual finding. The remainder is awarded to either kind of eligble recipient as determined by the Secretary of Education. Both bills also newly authorize a grant program to higher education institutions for the provision of campus-based child care services. They also create a new Special Leveraging Educational Assistance Partnership program that is established with funds appropriated for the State Student Incentive Grant (SSIG) program above specified thresholds ($25 million in the House bill and $35 million in the Senate bill). (The Senate bill renames the SSIG program as the Leveraging Educational Assistance Partnership (LEAP) program.) The Special LEAP funds are to be used for a wide variety of support activities for needy students, including transitions programs from secondary to postsecondary education, scholarships for students entering teaching, and early intervention services and mentoring. As signed into law, H.R 6 includes aprogrmfor campus-based child care sewices. It also renames the SSIG progrm as the LEAPprogram and sets the thresholdfor finding the Special LEAP at $30 million. P.L. 105-33, H.R 2015 The Balanced Budget Act of 1997. Contains FY1998 budget reconciliation provisions affecting the FFEL and DL programs. Provides for $1.76 billion in savings over a 5-year period through recall of funds from guaranty agencies participating in the FFEL program, reduction in DL administrative expenses, and elimination of a loan origination fee for institutions participating in the DL program. Signed into law August 5, 1997. H.R 6 (McKeon) Higher Education Amendments of 1998. House version approved (28-3) by House Committee on Education and the Workforce March 19, 1998 and ordered reported. Passed House May 6, 1998 (414-4). On April 1, 1998, the Senate version of this legislation (S. 1882) was approved (18-0) by Senate Committee on Labor and Human Resources and ordered reported. Senate completed action on S. 1882 July 9, 1998, and inserted text of this bill into H.R. 6, in lieu of House-passed text of H.R. 6. Senate then passed H.R. 6, as amended, July 9, 1998 (96-1). Conference report (H.Rept. 105-750) filed in the House September 25, 1998. Conference report approved by the House September 28, 1998 (voice vote) and by the Senate September 29, 1998 (96-0). Signed into law October 7, 1998. H.R. 914 (McKeon) The Cost of Higher Education Review Act. Would establish a National Commission on the Cost of Higher Education, to review and make recommendations regarding trends in tuition and other fees charged by postsecondary institutions. Reported by House Committee on Education and the Workforce. Passed House March 11, 1997 (H.Rept. 105-14). On April 16, 1997, Senate passed an amended version of H.R. 9 14; and on May 13, 1997, House agreed to Senate amendments. A similar bill, H.R. 1511, was introduced by Representative McKeon, and was ordered to be reported by House Committee on Education and the Workforce on May 7, 1997. Provisions similar to those of H.R. 914 and H.R. 1511 were later enacted as part of P.L. 105-18 (H.R. 1871), an emergency supplemental appropriations act, signed into law June 12, 1997. H.R. 2535 (McKeon) Emergency Student Loan Consolidation Act of 1997. Reported by House Committee on Education and the Workforce (H.Rept. 105-322). Passed House October 21, 1997. Would permit borrowers to consolidate all of their FFEL and DL loans under the FFEL program for a limited period of time. Previously, borrowers wishing to consolidate loans of both types could do so only through the DL program. Also provides that HOPE Scholarship or Lifetime Leaming tax credits be excluded from calculations of a student's need for assistance under HEA Title IV programs. A similar bill, S. 1294, was introduced by Senator Jeffords, reported by the Senate Committee on Labor and Human Resources October 29, 1997 (S.Rept. 105-122). Provisions similar to those of H.R. 2535 and S. 1294 were ultimately enacted as part of P.L. 105-78 (H.R. 2264), FY1998 appropriations act for the Departments of Labor, Health and Human Services, Education, and Related Agencies. CRS Reports CRS Report 97-18 1. Access to Postsecondavy Education, by Richard N. Apling and James B. Stedman. CRS Report 95-1 10. The Federal Direct Student Loan Program, by Margot A. Schenet. CRS Report 94-810. The FederalF'ily Education Lom Programs, by Margot A. Schenet. CRS Report 97-339. Federal TRIO Programs and the National Early Intervention Scholnvship and Pavtnevshzp Pvopam, by James B. Stedman. CRS Report 96-83 1. Higher Education: Campus-Based Programs, by Deborah A. Santiago. CRS Report 97-671. Institutional Eligbility for Student Aid Under the Higher Education Act: Background and Issues, by Margot A. Schenet. CRS Report 97-101. Pell Grants: Background andlssues, by Margot A. Schenet. CRS Report 96-998. Remedial Cou~se-Takingin Higher Education, by Deborah A. Santiago. CRS Report 97-40. State Roles in Postseconduy Education and the Higher Education Act (HEA): Optionsfor HEA Reauthorization, by Wayne C. Riddle. CRS Report 96-749. State Student Incentive Grants An Overview, by Laura L. Monagle. CRS Report 97-916. Student Loan Consolidation, by Margot A. Schenet. General Distribution Memorandum. Student Loan Issues in Reauthorization of the Higher Education Act, by Margot A. Schenet. CRS Report 98-291. Student Loms: Proposalsfor Recmthorization, by Margot A. Schenet. CRS Report 97-633. Student Loans: Reconciliation Provisions, by Margot A. Schenet CRS Report 97-915. T m Benejts for cation in the Taxpuyer Relief Act of 1997, by Bob Lyke. CRS Report 98-166. Teacher Quality and Quantity: Proposals in the 105th Congvess, by James B. Stedman. CRS Report 97-737. Title Ill of the Higher Education Act: Status and Reauthorization Issues, by James B . Stedman.