Senate Approves Reauthorization Bill

The U.S. Senate has approved, on a 95-0 vote, legislation to reauthorize the Higher Education Act of 1965. The legislation includes the following major provisions:

• Provides improved information to students and parents about college costs and publicizes postsecondary institutions whose cost increases exceed those of peer institutions.
• Requires colleges to establish and follow a code of conduct with respect to student loans; reforms selection requirements for preferred-lender lists; and prohibits payments, gifts and other inducements from lenders to college officials.
• Simplifies the process of applying for federal student aid by creating a two-page EZ-FAFSA for low-income students.

The Senate rejected a proposed amendment to the bill that would have established a Federal Supplemental Student Loan Program to compete with private education loans. The amendment’s sponsor, Sen. Sherrod Brown, D-Ohio, said the provision would promote competition with private lenders to lower loan costs. Rep. Mike Enzi, R-Wyo., argued the proposal would result in “government price fixing” by giving the secretary of education the authority to set interest rates. The amendment failed on a vote of 38-53.

The Senate approved amendments that would make the following changes in the reauthorization bill:

• Establish a clearinghouse of federal- and private-loan interest rates, borrower benefits and other terms to help student- and parent-borrowers select their lenders.
• Conduct a study of the employment of college graduates.
• Provide funding to certain Upward Bound programs that failed to receive funding this year.
• Enhance the ability of minority-serving postsecondary institutions to deliver instruction over digital or wireless networks.
• Require foreign medical schools to demonstrate that 75 percent, rather than the current 60 percent, of their graduates pass licensing exams, in order to receive federal student aid.
• Require that, as a condition of receiving federal aid, teacher-training programs set annual goals for producing teachers in areas of national need.
• Provide student-loan-repayment assistance to prosecutors, public defenders and legal-services attorneys.
• Strengthen the prohibition against postsecondary institutions using federal funds to lobby Congress.

No reauthorization legislation has been introduced in the U.S. House. Meanwhile, Congress has extended the Higher Education Act for three additional months, until Oct. 31, to give lawmakers time to complete work on reauthorization.