TG

The Guarantor of Choice SM

TG's Legislative Report

December 15, 2004

Happy Holidays!

This is the final Legislative Report for 2004, and we want to wish all of you a happy, safe, and restful holiday.

From the look of things, both the 109th Congress and 79th Texas Regular Session of the Texas Legislature will be convening in January with serious spending and budget issues to consider at the top of their agenda. Since the leadership and majorities in the congress and state legislature are still committed to not raising or imposing new taxes, barring any unforeseen changes, lawmakers will be carefully reviewing all spending priorities for programs funded through discretionary appropriations and ways to reform those funded through entitlement spending, including student financial aid and other programs concerned with improving access to postsecondary education.

The student financial aid community will be focused on the reauthorization of the Higher Education Act and FY2006 appropriations at the congressional level, and the TG Sunset bill and legislation to implement the recommendations submitted by the Texas Student Financial Aid Steering Committee, along with appropriations for the TEXAS Grant, TEG College Work Study programs. The Texas student financial aid community is well positioned to ensure that our key lawmakers are well informed about the issues and positions of most importance to insuring financial access for Texas students and families to postsecondary education opportunities thanks to the continued, sustained, and hard work put forth by TASFAA, ATLE, ICUT, and others in developing an interest and method for the Texas student aid community to speak with a single effective voice to policymakers.

So, after enjoying a well deserved holiday respite, we are sure we will all come back, well rested and ready to get back to work in what promises to be a very challenging time.

Again, on behalf of the TG Congressional and Legislative Relations staff, we wish you the happiest of holidays. We appreciate the relationships developed over the years among the student financial aid community and legislative and congressional offices, especially in terms of your support, assistance, and cooperation. We sincerely hope that 2005 will bring success and happiness to each of you.

Have a safe and enjoyable holiday.

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From The Office Of Senator Michael Enzi (R-WY), Incoming Chair Of The Senate Committee On Health, Education, Labor and Pensions

Congress is only weeks away from beginning a new session. Change is in the air and some seasoned members are looking forward to the opportunities that will come with their newly increased responsibilities.

U.S. Sen. Mike Enzi is one such member. Pending full committee approval, which could occur anytime between now and mid-January, Enzi is expected to be the next chairman of the Health, Education, Labor and Pensions Committee (HELP).

Enzi plans to work closely with committee members from both sides of the aisle, stake holders and the Administration to form an agenda for the Health, Education, Labor, and Pensions Committee, which will include work on major initiatives as well as revisiting legislation from previous Congresses.

"I enjoyed working with Chairman Gregg to help pass bills such as the individuals with Disabilities Education Act and other important initiatives. I want to build on those successes," said Enzi. "Over a year ago, the committee unanimously approved a comprehensive job training bill (Workforce Investment Act), but it fell victim to election year-politics. I'm hopeful we can quickly move bipartisan bills where we've already reached agreement."

Enzi also will conduct aggressive oversight of federal departments and agencies under the committee's jurisdiction to ensure accountability in fulfilling their missions including their requirements under the Government Performance and Results Act.

"I'll be asking important questions like what are you doing with taxpayer money and how can we tell what progress you've made towards the goals you have set. I have a keen interest in the measurable progress of management reforms in all federal agencies. I believe closer scrutiny of the Departments of Health, Education and Labor and the Pensions Benefit Guarantee Corporation would assist these entities in effectively and efficiently accomplishing their mission, which is to serve the American people," said Enzi.

Enzi is a former small business owner, mayor and a resident of the state with the fewest people in the nation.

"I've seen it time and time again. Congress passes legislation or an agency writes a rule that requires a stack of paperwork or complicated compliance. Large corporations have no problem because they can afford to hire specialty staff specifically to help with those tasks, but the small business person can't afford that," said Enzi. "It's similar to some education grant programs. Large districts are able to cope with the mandates, but small districts are not given enough practical flexibility for the money to do their students any good. I've been working to correct the inequities."

Health
Enzi has worked on healthcare issues since his election to the Senate in 1996. He has played important roles on a variety of healthcare topics, including high-profile bills such as the Medicare reform and global AIDS bills that became law during the 108th Congress.

Looking forward to the 109th Congress, Enzi intends to enact legislation to build a strong national biodefense and rebuild our domestic vaccine industry.

He believes in reducing healthcare costs through market-oriented solutions that combine consumer choice with more information about the quality and value of healthcare providers, procedures and bringing health information technology into the 21st Century.

Enzi would like the committee to review the FDA's drug safety systems to ensure the FDA has the structure and strategies in place to maintain its preeminence as the gold standard for protecting the public health. It's important to pass comprehensive patient safety legislation that establishes a framework through which hospitals, doctors, and other health care providers could work to improve health care quality in a protected legal environment.

He wants to make health insurance more affordable and accessible by working to simplify and harmonize insurance market standards and regulations. He is looking for ways to pave the way for a more competitive health insurance market.

Increasing access to community health centers, free clinics, and other providers of low-cost care to low-income and uninsured families are part of President Bush's healthcare agenda and Enzi will continue to work with the President in these and other areas.

Enzi also plans work on strategies to ensure an adequate supply and distribution of doctors, nurses and other critical health professionals, especially in rural and frontier areas.

Some health-related bills Enzi has been and is working on include the Patient Safety and Quality Improvement Act, S. 720; the Reliable Medical Justice Act, S. 1518; the Genetic Information Nondiscrimination Act of 2003, S. 1053; the Frontier Healthcare Access Act of 2003, S. 1883; the Pharmacy Education Aid Act, S. 648; and the Keeping Seniors Safe From Falls Act of 2004, S. 1217.

Education
Enzi would like to pass legislation that helps make sure college is accessible, affordable, and within reach of any student who wants to attend, and that students leave college ready for the workforce. He supports increased accountability for federal program dollars, improved flexibility in the use of federal funds and a stronger focus in federal education law on the needs of rural educators and a "common sense" approach to education reform proposals.

It's a priority for Enzi to ensure that children are cared for in safe, high quality education programs that give adequate focus to children's academic preparation as well as their well-being.

Reauthorization of federal programs in a way that would ensure career and technical education programs are aligned with other workforce preparation programs is also important.

"In this technology-driven, global economy, school is never out for America's students and workers," Enzi said.

He looks forward to developing a comprehensive approach to education and training that promotes a lifetime of learning for the American workforce and ensures our long-term competitiveness in the global market.

Some education related bills Enzi has been and is working on include: The Carl D. Perkins Career and Technical Education Improvement Act of 2004, S.2686 and the Higher Education Affordability Access and Opportunity Act of 2004, S. 2795. There are provisions in the Fair and Accurate Credit Transactions Act authored by Enzi regarding financial literacy.

Enzi also introduced the Workforce Investment Act (WIA) Amendments of 2003, S. 1627 which the Senate passed by unanimous consent. This bill would reauthorize and amend the 1998 WIA legislation enacted to create a streamlined job training and employment system that would be responsive to the needs of employers and workers.

Labor
Enzi looks forward to addressing issues that will achieve greater safety and health for our most important resource - our great American worker - through meaningful Occupational Safety and Health Administration (OSHA) reform and Mine Safety and Health Administration (MSHA) oversight. Enzi authored the Safety Advancement for Employees Act of 2004, S. 2719.

The bill would further improve the safety and health of work environments.

Pensions
Enzi looks forward to a greater role in oversight and reform of our nation's pension and benefits programs. He anticipates undertaking comprehensive pension reform to stabilize the private pension system to ensure the retirement security of hardworking Americans. Enzi was one of the authors of the Sarbanes-Oxley Act to strengthen the accounting and auditing professions. Key provisions of that law protect plan beneficiaries from insider trading activities of pension fund insiders. In the 108th Congress, he introduced the Retirement Security Advice Act of 2003, S. 1698, that would have promoted greater investment advice to workers in managing their retirement income assets.

Enzi is a Certified Professional in Human Resources and the Senate's only accountant by profession. He was the accounting manager, computer programmer and safety officer for Dunbar Well Service (1985-1997) and commissioner on the Western Interstate Commission for Higher Education (1995-1996) and served on the Education Commission of the States (1989-1993).

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Sunset Advisory Commission TG Review Update

The review phase of TG by the Sunset Advisory Commission has been completed. The updated materials can be accessed on the Sunset Advisory Commission Web site at http://www.sunset.state.tx.us/whatsnew.htm.

The twelve member commission (five state senators, five state representatives, and two public members) convened in a public hearing on December 15th to formally adopt its staff's report on TG.

TG's two exceptions to the report's recommendations, i.e., the number of board members and the Governor appointing the board chair, were removed from the report without discussion. The report now calls for TG to have an 11 member board of directors (instead of the staff recommended number of 9) and for the board chair to continue to be elected annually by the board (rather than authorizing the governor to separately appoint the chair).

Recommendation number three in the staff report was also expanded to direct TG to report to the legislature on a regular basis on the state of student financial aid in Texas, including the demand for grants and loans among Texas postsecondary education students.

TG continues to be pleased with the positive tone of the Sunset process and looks forward to a successful legislative session next year during which TG's Sunset bill will be considered.

TG will work with the Sunset Advisory Commission and the Texas Legislative Council to draft legislation to implement the report's recommendations. Two legislative members of the Commission then will introduce the legislation during the 79th Texas Legislature, which convenes on January 11, 2005 for a 140 day session.

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Letter On Behalf Of The Texas Student Financial Aid Community Sent to Education Secretary-Designate

December 14, 2005

Ms. Margaret Spellings
Assistant to the President for Domestic Policy
The White House
2nd Floor, West Wing
1600 Pennsylvania Avenue

On behalf of the Texas Guaranteed Student Loan Corporation (TG), the Texas Association of Student Financial Aid Administrators (TASFAA), the Association of Texas Lenders for Education (ATLE), and the entire student financial aid community in Texas, we congratulate you on your recent appointment as Secretary of Education.

We know that you will do a great job, and we want you and your staff to be assured that we will be here to act as a resource during the upcoming reauthorization of the Higher Education Act (HEA).

As practically a native Texan, you know that we pride ourselves on working together. Likewise, the Texas student financial aid community prides itself on working together on issues of common interest. We believe we are the only state-based student financial aid community that, two years ago, developed a common HEA reauthorization position paper. The paper addresses those HEA issues that are of paramount importance to Texas — specifically, those that will, in tandem with the state's CLOSING THE GAPS initiative (www.collegefortexans.com), ensure financial access to postsecondary education for all Texans.

The original paper is available at www.tgslc.org/reauth/reauth_txfinaid.cfm.

As a product of Texas' higher education system, you are most likely aware of the postsecondary education access issues currently at play in this state. They are not unique, but, because of our dramatically changing demographics, are more pronounced and urgent than in most of the rest of the country. The federal student financial aid programs compose almost 90 percent of all direct student financial aid awarded each year to Texas postsecondary education students and families who need financial assistance to pursue and obtain a college degree. These programs authorized under Title IV of the HEA are, therefore, crucial to the future social and economic well being of Texas.

In addition to offering our congratulations and assistance, we would like to take this opportunity to express our support for HR 4283, the College Access and Opportunity Act of 2004, and for HR 4102, the Access and Equity in Higher Education Act of 2004. Both bills were introduced earlier this year as HEA reauthorization legislative vehicles, and will, presumably, be reintroduced during the 109th Congress.

While there is already substantial overlap between the two bills, the Texas student financial aid community would like to see Sections 103-LOAN FLEX and 104-CONSOLIDATION LOAN INTEREST RATES of HR 4102 incorporated into HR 4283. These provisions expand repayment options for student loan borrowers and lower the interest rate for Consolidation loan borrowers whose payments exceed 8 percent of their total income to 1 percent above the 91-day Treasury Bill (instead of 2.3 percent), and lower the interest rate cap from 8.25 percent to 5 percent, 4 percent, and 3 percent for Consolidation loan borrowers whose payments exceed 10 percent, 11 percent, and 12 percent of their total income, respectively.

The Texas student financial aid community also believes that the Federal Consolidation Loan Program should be reviewed thoroughly. Aspects of the program that we feel should be scrutinized include the program's original purpose, benefits, and conditions; the program's cost to lenders and holders; and the lack of parity between the Federal Family Education Loan Program (FFELP) and the Federal Direct Loan Program. Most importantly, however, we must examine the appropriate level of taxpayer subsidization for Consolidation loans after the borrower leaves school, and determine whether the increasing federal costs to maintain the Consolidation Loan Program in its current state should supersede the need to increase other federal student financial aid programs for current students.

Furthermore, the Texas student financial aid community wholeheartedly endorses, in addition to the sections in HR 4283 that increase authorized funding levels for the Title III, IV, and V programs, Section 487 — COLLEGE ACCESS INITIATIVE. The provisions in this section promote early awareness, outreach, and the dissemination of consumer information about postsecondary education. These provisions are in line with aspects of Texas' CLOSING THE GAPS initiative, which establishes regional training and outreach centers, provides a toll-free Texas Financial Aid Information Center information line (888-311-8881), and provides a bilingual Internet web site.

The Texas student financial aid community also supports:

  • Making the Pell Grant Program available to students attending college year-round. This is an important issue in Texas, as we try to enroll more students — particularly students from underrepresented populations — and, at the same time, identify ways to encourage students to complete their degree programs in four or five years. This proposal, if enacted, will help this effort, as well as with persistence and graduation of students.
  • Repealing the tuition sensitivity in the Pell Grant Program so that all eligible students may receive the same maximum grant.
  • Expanding the income verification match between the Department of Education and the Internal Revenue Service (per HR 3613 by Representative Sam Johnson, R-TX) which will reduce fraud and abuse, better target limited Pell Grant dollars, save money, and, possibly, simplify the student financial aid application process.
  • Lowering the student loan origination fee in both the FFELP and Direct Loan Program to 1 percent. It is time to begin phasing out this "temporary fee" established in a budget bill in 1981.
  • Establishing an interest-only, two-year repayment plan option for borrowers who may have difficulty in meeting their repayment obligations.
  • Renewing the expired exemption of the 30-day delayed disbursement requirement and the multiple disbursement requirement for schools with a default rate of 10 percent or less for the last three fiscal years for which data are available.
  • Changing interest rates to provide a market-based variable interest rate for all Stafford, PLUS, and Consolidation loans. If this change is enacted, all borrowers will be treated equally - benefiting when interest rates are low and paying higher rates when rates increase to a potential maximum of 8.25 percent. The change for Consolidation loans will also help to return the Consolidation Loan Program to its original intent when it was created by the Congress in 1986.
  • Increasing the annual subsidized Stafford loan limits for first- and second-year students in both the FFELP and Direct Loan Program, with the inclusion of the above mentioned Sections from HR 4102.
  • Phasing out the Section 413(D) ALLOCATION OF FUNDS formula for campus-based student financial aid programs. This statutory formula has been in place for 25 years and was last updated 10 years ago. Consequently, the formula allocates campus-based funds based, in large part, on when an institution began participating in one of the campus-based programs and on the state in which the institution is located. Population growth patterns and institutional missions are not considered. The provisions in HR 4283 would gradually reduce the "base guarantee" protection currently granted to certain institutions, thus freeing up additional dollars to be distributed to all eligible institutions, ensuring that the allocations will be equitably distributed to the neediest students at all participating institutions across the nation.

In conclusion, we recognize the impact that the federal deficits have on setting spending priorities. Given these constraints, we, therefore, applaud the leadership and members of the House Education and Workforce Committee for crafting legislation that addresses the important issues associated with the reauthorization of the HEA in a fair and bipartisan manner. We hope that the Committee will be equally aggressive during the 109th Congress to finally reauthorize the HEA.

As you can see, the Texas student financial aid community has done a good deal of work and is prepared to assist you and your staff in any way you deem appropriate. We want to be a resource and sounding board. The Texas student financial aid community is pleased to provide these comments to you, and urge you to consider our input. We look forward to continuing to provide input as the HEA reauthorization process continues, invite your questions and requests for further information, and thank you for your past and future support.

Sincerely,

Sue McMillin, President and CEO
Texas Guaranteed Student Loan Corporation (TG)
sue.mcmillin@tgslc.org
(512) 219-4949

James F. Lane, Ph. D., 2004-2005 President
Texas Association of Student Financial Aid Administrators (TASFAA)
Jf.lane@ttu.edu
(806) 742-3681

Phillip Wambsganss, 2004-2005 President
Association of Texas Lenders for Education (ATLE)
phillipw@nthea.com
(817) 265-9158

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For more information, contact:

TG Congressional and Legislative Relations
(512) 219-4503
P.O. Box 83100
Round Rock, TX 78683-3100

 

© 2008 Texas Guaranteed Student Loan Corporation