House Panel Approves Reauthorization Legislation

On a 45-0 vote, the U.S. House Committee on Education and Labor sent the College Opportunity and Affordability Act to the full House for action. The legislation reauthorizes major federal student-aid programs, seeks to constrain college-cost increases, and establishes new guidelines for relations between postsecondary institutions and student-loan service providers.

The committee approved several amendments to the original bill. The panel adopted amendments from the bill’s sponsor, Committee Chairman Rep. George Miller, D-Calif., including the following items:

• Further clarify that college and university presidents and trustees may serve on governing boards of lenders, loan servicers and guarantors, as long as they disqualify themselves from university decisions regarding loan transactions.
• Clarify that borrower data requested by a postsecondary institution or servicer in connection with default-prevention efforts may be shared only with the school or borrower.
• Provide loan forgiveness for civil legal-assistance attorneys.
• Require guarantors to provide debt-management, default-prevention and financial-literacy programs for students and parents.

The panel also adopted the following additional amendments that affect student loans:

• An amendment offered by Rep. Raúl Grijalva, D-Ariz., changing the definition of the cohort-default rate to a three-year rather than the current two-year period and requiring collection and reporting of life-of-loan default rates for cohorts of borrowers. The amendment also would require lenders and postsecondary institutions to provide additional borrower counseling prior to loan disbursement, prior to the loan entering repayment and during repayment.
• An amendment offered by Rep. Tom Price, R-Ga., requiring an annual audit of the William D. Ford Direct Loan Program and annual reports of the impact of direct loans on the national debt.

The legislation is expected to come to a vote in the full House in early December.