House Republicans Introduce Reauthorization Proposal

Republicans on the U.S. House Committee on Education and Labor have introduced their proposal to reauthorize the federal law that supports major federal student-aid programs.

In introducing the legislation, the College Access and Opportunity Act, House Republicans said the intent is to “restore the HEA to its original mission of providing access to college for low- and middle-income students.”

Key components
The legislation would repeal a prospective auction of rights to make parent PLUS loans. The auction plan recently was enacted as part of the College Cost Reduction and Access Act.

The measure also would align interest rates on PLUS loans issued under the Federal Family Education Loan Program with rates in the direct-loan program. Due to a drafting error in the Higher Education Reconciliation Act of 2005, Federal PLUS-loan rates were fixed at 8.6 percent, while Direct PLUS rates were set at 7.9 percent.

Subject to annual appropriations, the measure also would provide loan forgiveness of up to $5,000 for borrowers who have served for at least five years in “areas of national need,” including early childhood educators, foreign-language specialists, speech-language pathologists and certain medical specialists.

The bill would establish a code of conduct governing lender-school relations. Lenders would be prohibited from revenue-sharing arrangements; from paying consulting fees to campus staff; and from providing gifts or travel reimbursements, except for reasonable costs for professional development activities. Lenders would be permitted to reimburse school advisory-council members for reasonable expenses.

The legislation also would require lender and school disclosures of loan terms.

The Republican proposal also would provide for year-round Pell Grants, a simplified Free Application for Federal Student Aid, and additional online information regarding college costs.

The proposal would require any postsecondary institution that raises its student costs by twice the rate of inflation during a three-year period to provide an explanation to the secretary of education. Institutions with the largest price increases would be required to establish quality-efficiency task forces, and the education secretary could place institutions that failed to reduce subsequent student cost increases on “affordability alert” status.

Other reauthorization action
House Democrats have yet to unveil their reauthorization proposals. The U.S. Senate Committee on Health, Education, Labor and Pensions approved a reauthorization bill in June, but the measure has yet to be considered by the full Senate.

To access the text of the College Access and Opportunity Act, you will need Adobe Reader.