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TG's Legislative Report
May 27, 2005
- Congressional Update; FY 2006 Budget Resolution Adopted
- State Legislative Update; House and Senate Appropriations Bills Differ in Approach and Funding
Congressional Update; FY 2006 Budget Resolution Adopted
The House and Senate Appropriations and substantive committees continue to work on the 13 FY 2006 appropriations bills using the FY 2006 Budget Resolution as their blueprint. The Resolution calls for $2.6 trillion in spending (including $843 billion in discretionary spending), $106 billion in new tax cuts, and $35 billion in reconciliation savings.
Of the targeted reconciliation savings, the Resolution calls for $12.7 billion to come from programs under the jurisdiction of the House Education and Workforce Committee and $13.7 billion to come from the same programs under the jurisdiction of the Senate Health, Education, Labor, and Pensions Committee. The Committees will decide which laws to amend (including the Higher Education Act) to achieve their savings targets. Student loans will probably bear the brunt of the savings through increased risk sharing amendments to the HEA.
The Administration, while proposing the Pell Grant program be sufficiently funded over the next five years to achieve a $100 annual increase in the annual maximum grant in order to have a maximum grant of $4,550 by 2010 and to retire the $4.3 billion shortfall in the program, is proposing estimated savings of $19 billion over a ten year period from reforms in the Federal Family Education Loan Program (FFELP)
The Administration's budget submission proposes to abolish the Perkins Loan, GEAR UP and TRIO Upward Bound and Talent Search programs to achieve an additional savings, and to hold the other Title IV student aid programs to a maximum 2 percent increase over current year appropriations.
The Administration's FY 2006 appropriations submission can be accessed at: www.omb.gov.
The Congressional Budget Office's annual Budget Options report to the congress released this month identifies $31.5 billion in potential savings over ten years from the student loan programs. The gain is to be obtained from changes targeted at borrowers and FFELP lenders $2 billion from repealing the 9.5 percent guaranteed yield on FFELP loans, $7.7 billion from excluding access to subsidized loans for graduate students, $2.9 billion from raising the borrower interest rate, and $18.9 billion from repealing the guaranteed interest rate floor for FFELP lenders.
CBO Budget Options can be accessed at: www.cbo.gov. The education options begin on page 12.
Summaries of the House and senate Budget Resolutions and support documents are available at www.house.gov/budget/ and www.senate.gov/~budget/republican/.
Higher education related legislation of interest filed during the First Session of the 109th Congress. Congressional legislation can be accessed at: thomas.loc.gov.
HR 507 — College Access and Opportunity Act of 2005
(Replaced by HR 609)
This bill is the initial House Republicans' Higher Education Reauthorization bill to be introduced during the 109th Congress. It is, essentially, a refilled HR 4283 from the 108th Congress, which had the same title (with the exception of the year).
Among the bill's provisions, HR 507 proposes to
- revise the definition of higher education institution that brings proprietary schools under the definition;
- repeal provisions that apply to proprietary schools;
- move all student loans to a variable interest rate;
- reduce student loan origination fees;
- increase student loan annual limits;
- reauthorize and amend the loan guaranty VFA provision by repealing inducement waiver provision;
- revise the campus-based allocation formula;
- reinstate student loan provisions for low default schools to allow quicker disbursement of loan funds to students;
- increase Pell Grant funding;
- strengthen funding for Title III and Title V institutions;
- increase accountability, transparency, and access to cost and consumer information; and
- expand teacher loan forgiveness programs.
HR 508 — The FED UP Higher Education Technical Amendments Act
This bill was filed as HR 12 during the 108th Congress and HR 4866 during the 107th Congress. Among the bill's provisions, it proposes to extend the provisions concerning exemptions from the 30 day delayed disbursements of student loan funds to first time borrowers and multiple disbursements of loan funds for low default schools; clarifies return of Title IV fund regulations; allow student loan forbearances to be requested in writing. HR 508 has one cosponsor.
HR 509 — International Studies in Higher Education Act
This bill is HR 3077 filed during the 108th Congress. It proposes to reauthorize Title VI of the HEA and establishes a program to support and promote international studies for students who pursue careers in international relations. HR 3077 was passed by the House last year.
HR 510 — Graduate Opportunities in Higher Education Act
This bill was filed during the 108th Congress as HR 3076 and was passed by the House. The bill proposes to reauthorize Title VII of the HEA and adds a new provision that promotes graduate teacher education programs in K-12 shortage areas.
HR 511 — Pell Grant Plus Act
This bill was introduced last year as HR 3894. The bill proposes to award an additional Pell Grant of $1,000 for two years to Pell recipients who graduate from high school with a postsecondary education preparatory diploma.
HR 555 — School As Lender Reform Act
This bill proposes to amend and clarify the school as lender program authorized under Section 435(d)(2) of the HEA, to require revenues generated to a participating institution are to be used to supplement need based grants already in existence; that contracts between schools and lenders by awarded through competitive bidding; and that participating schools offer lower amounts of loan aid to their student aid recipients.
HR 609 — College Access and Opportunity Act of 2005
Substitute for HR 507. HR 609 differs from HR 507 with respect to the Pell Grant provision. This bill has 2 cosponsors.
HR 625
This bill proposes to amend the IRS Code to prohibit the use of Pell Grant and SEOG as offsets to the Hope Scholarship Tax credit.
HR 670
Teacher Recruitment and Retention Act of 2005
This bill proposes to make the student loan forgiveness increase $17,500 included in the last two appropriations bills permanent.
HR 1009
This bill proposes to allow student loan borrowers who have consolidated their loans to reconsolidate with their choice of lender or consolidator.
HR 1030
This bill requires institutions to enter into agreements with for profit organizations for participation in the federal Work-Study program.
HR 1032
This bill proposes to extend the single disbursement for student loans for low default rate schools.
HR 1033
This bill proposes to eliminate the limitation of the deduction of student loan interest on income tax returns.
HR 1293 — Access and Equity in Higher Education Act
This is the refiled HR 4102 from the 108th Congress which did not pass. It is the Coalition for Better Student Loans HEA reauthorization bill which proposes to increase annual and aggregate student loan limits, reduce loan fees, make all student loans subject to a variable interest rate, and, extends the FDLP income sensitive repayment plan to the FFELP. HR 1293 has 24 cosponsors.
HR 1338 — College Loan Assistance Act
This bill proposes to allow borrowers with consolidated student loans to reconsolidate their debt. The bill also proposes to increase the annual maximum Pell Grant to $7,000.
HR 1425/S. 745 — Student Aid Reward Act (STAR) of 2005
This legislation, originally introduced during the last congress as the Direct Loan Reward Act (HR 4370) proposes to provide financial incentives to institutions if they switch participation from the higher cost of the two major student loan programs to the lower cost program (FFELP and FDLP). Any savings to the federal government resulting from the switch would be split 50/50 between the school and the federal government for use in other student financial aid. The Congressional Budget Office has estimated the bill could generate a federal savings of up to $12 billion over 10 years. The intent of the bill is that this savings would be used to double the appropriation for the Pell Grant program by almost 100 percent over this period. HR 1425 has 31 cosponsors, the most of any HEA reauthorization-related bill. The Senate companion has three.
HR 1617
This bill proposes to allow student loan borrowers to consolidate their loan debt one time and choose a variable or fixed rate, amends Section 438 of the HEA, and repeals the single holder rule.
HR 2132 — Higher Education Relief Opportunities for Students Act of 2005 (HEROES)
This bill proposes to continue to allow the Secretary of Education to waive student loan obligations of active duty military personnel.
HR 2340/S. 117 — Loan Forgiveness for Head Start Teachers
This bill proposes to extend student loan forgiveness (Perkins, FFELP, and FDLP) to Head Start teachers who have taught in the program for five, or more, years.
S. 9 — Lifetime of Education Opportunities Act of 2005
This is a "sense of the senate" Republican omnibus education bill that includes HEA reauthorization provisions. It is, for the most part, legislation that expresses "the sense of the Senate" concerning a host of K-16 education issues. Included among these are, that during the reauthorization process, the Senate should address:
- "the rising costs of higher education";
- "promote student academic preparation";
- "encourage efforts to increase the availability of financial aid information";
- "simplify the student aid application process";
- "improve the level of accountability in the federal student aid programs";
- "address the Pell Grant shortfall";
- "reduce the time to graduation"; and
- "support stronger partnerships between businesses and higher education".
The bill includes "sense of the Senate" clauses concerning minority serving institutions. S. 9 has two cosponsors.
S. 15 — Quality Education for All Act
This is the Senate Democrat "sense of the senate" education bill that includes HEA reauthorization provisions. Among its higher education-related provisions, this bill proposes to:
- reauthorize and increase the authorized appropriations for the TRIO and GEAR UP programs;
- hold certain Pell grant recipients harmless when the annual tax table updates are made;
- a "sense of the Senate " provision that states the maximum annual Pell Grant for 2006-2007 should be $5,100;
- exempt payment of tuition and fees and increase student loan forgiveness (to be paid for through diversion of FFELP special allowance payments authorized under Sec. 438(b ) for students planning to teach mathematics, science, and special education; and
- expand the income tax deduction for higher education expenses.
S. 371 — The College Quality, Affordability, and Diversity Improvement Act of 2005
This is the re-filed S. 1793, the Senate Democrat's HEA reauthorization bill from the last Congress. Among the bill's provisions, the bill proposes to:
- raise the annual authorized levels for the Pell Grant, TRIO, GEAR UP, LEAP, Title III and Title V programs;
- increase the student loan forgiveness amounts for certain teachers;
- increase the amount of earnings exempted from the need analysis process;
- eliminates the student loan origination fee;
- indexes each state's share of Pell Grant funding to the state's effort in providing student aid;
- allows reconsolidation of student loans into the FDLP;
- establishes a comprehensive program to increase recruitment, retention, and graduation of low income students; and
- establish a competitive grant program to fund initiatives to reduce college costs.
S. 371 has six cosponsors.
S. 371 includes provisions from HR 1425 — the Student Aid Reward (STAR) Act that proposes to provide financial incentives to institutions if they switch participation from the FFELP to the FDLP. Any savings to the federal government resulting from the switch would be split 50/50 between the school and the federal government for use in other student financial aid. The Congressional Budget Office has estimated the bill could generate a federal savings of up to $12 billion over 10 years. The intent of the bill is that this savings would be used to double the appropriation for the Pell Grant program by almost 100% over this period.
S. 697 — Higher Education Opportunity Through Pell Grant Expansion Act of 2005
This bill proposes to increase the annual maximum Pell Grant to $5,100 and index the grant amount to inflation. The increase would be paid for by changes to section 438 of the HEA.
S. 1029 — Accessing College Through Comprehensive Early Outreach and State Partnerships Act
This bill proposes to expand the LEAP program and to establish a new program to provide matching grants to states to establish partnerships within each state to develop and delivery programs and services that increase postsecondary education enrollment.
S. 1030 — Financial Aid Form Simplification Act
This bill proposes to implement the Federal Advisory Committee on Student Financial Aid's recommendations outlined in its latest report "The Student Aid Gauntlet".
S. 1098 — Student Loan Abuse Prevention Act
This bill proposes makes and retroactive changes made to Section 438 of the HEA by the last Congress and uses any savings to encourage student loan borrowers with 9.5 percent student loans to consolidate, increase appropriations for the Teacher loan Forgiveness Act and Pell Grants.
S. Res. 8 — Expressing the sense of the Senate regarding the maximum Federal Pell Grant
This senate resolution states the sense of the senate is that the maximum Pell Grant for 2005-2006 should be $4,500 and for 2010-2011, $9,000.
State Legislative Update — House and Senate Appropriations Bills Differ in Approach and Funding
The 79th Regular Session of the Texas Legislature will adjourn at midnight, May 31st.
The House and Senate FY 20066-2007 appropriations bills — HB 1 and SB 1 — are still being reconciled in a conference committee.
The Senate bill proposes $139 billion is spending for the two year 2006-2007 biennium. The House bill provides $137.5 billion.
For student financial aid, the bills propose:
Senate — appropriations for the TEG program totaling $141 million.
House — $133.8 million, slightly less than the $141.4 million for the current biennium.
Senate — appropriations for the TEXAS Grant program to be not less than $294.5 million.
House — $322.8 million, a decrease from $324 million for the current biennium.
Senate — appropriations for the TEXAS Grant II program to be not less than $10 million, an increase from $9.8 million for the current biennium.
House — $8.8 million.
Senate — new appropriations for the Texas B On Time Loan Program of $88 million.
House — new appropriations of $10.8 million.
Senate — appropriations for the College Work-Study program to be not less than $15 million.
House — $9.4 million, an increase from $8.8 million for the current biennium.
Senate — appropriations for the Teach for Texas program totaling $10.4 million, an increase from $10 million for the current biennium.
House — $9 million.
Senate and House — appropriations for the Early High School Graduation program totaling $8.6 million, up from $4.6 million for the current biennium.
Senate — Proposed total appropriations for student financial aid for the 2006-2007 biennium equals $590.4 million — which includes new spending for the B-On Time Loan program — compared to the House's $514 million. The current biennium's total is $512 million.
Both bills can be accessed at: www.lbb.state.tx.us/The_LBB/Access/AppBills_LBEs.htm
The following higher education/student financial aid related bills likely to pass as stand alone bills, or as amendments to other bills, like SB 1227-the omnibus higher education bill which includes the recommendations for improving student financial aid in Texas submitted to the legislature by the Texas student financial aid community and the Coordinating Board in the report "PREPARING FOR THE EMERGING TEXAS".
Other measures not listed here may be added as amendments to bills, or as riders to the final FY 2006-2007 appropriations bill.
Full background and details of each bill can be accessed at Texas Legislature Online (www.capitol.state.tx.us).
HB 64 — Relating to the automatic admission to public institutions of higher education of certain undergraduate transfer students.
HB 133 — Relating to the award of academic credit to a student at an institution of higher education for the completion of certain military training.
HB 503 — Relating to tuition and fee exemptions for certain military personnel and children of those personnel.
HB 609 — Relating to tuition rebate incentives for persons who complete certain degree and certificate programs without excessive credit hours.
HB 1010 — Relating to the eligibility of children of certain military personnel to receive Texas B-On-Time loans.
HB 1170 — Relating to readmission to a public institution of higher education of students who withdraw to perform active military service.
HB 1172 — relating to the tuition charged to resident undergraduate students of institutions of higher education for excess credit hours and to related formula funding
HB 1214/SB 532 — Relating to tuition for a student registered in a public junior college.
HB 2034 — Relating to an exemption from or refund of tuition and fees for certain lower-division students enrolled in a general academic teaching institution.
HB 2330 — Relating to the automatic admission of undergraduate students to general academic teaching institutions.
SB 30 — Relating to tuition and fee exemptions for students contracting to graduate in a timely manner from public institutions of higher education.
SB 31 — Relating to requiring students receiving certain financial aid at institutions of higher education to meet timely graduation and academic progress requirements.
SB 32 — Relating to certain special tuition rates at institutions of higher education.
SB 34/HB 2332 — Relating to the tuition rebate program for certain undergraduates at certain public institutions of higher education.
SB 302 — Relating to reports of strategies for increasing minority participation in higher education.
SB 333 — Relating to the eligibility of a high school graduate for automatic admission to an institution of higher education.
SB 420/HB 2274 — Relating to the continuation and functions of the Texas Guaranteed Student Loan Corporation.
SB 531 — Relating to tuition charges for certain courses repeated by students attending public junior colleges.
SB 582 — Relating to tuition exemption and fee exemptions for certain military personnel and their dependents,
SB 775/HB 1837 — Relating to tuition assistance for members of state military forces
SB 851 — Relating to a financial literacy pilot program in public schools
SB 1227 — Relating to payment of the costs of attending public and private postsecondary educational institutions and to financial aid and other measures to assist students to pay those costs.
SB 1227 is in a House-Senate Conference Committee. The major differences in the bills are the House-passed version includes the following provisions that are not in the Senate-passed bill:
According to the Texas Higher Education Coordinating Board, to fully fund the Texas Grant Program under this current 2.5 GPA requirement, $260 million would be required in 2006 and 2007. The legislature is planning on appropriating $165 million per year.
SB 1228 — Relating to a statewide assessment and accountability system for public institutions of higher education.
SB 1398 — Relating to the eligibility of a student for a tuition equalization grant.
SB 1399 — Relating to the portion of designated tuition required to be set aside to provide student financial assistance at institutions of higher education.
SB 1400 — Relating to a limitation on increases in the total amount of tuition and compulsory fees charged by public institutions on higher education.
SB 1529 — Relating to policies and measures to promote timely graduation of students from public institutions of higher education.
SB 1553 — Relating to the creation of a program for alternative funding of Toward Excellence, Access, and Success (TEXAS) grants.
SB 1554 — Relating to a limitation on increases in the total amount of tuition charges by public institutions of higher education.
TG Congressional and Legislative Relations
(512) 219-4503
P.O. Box 83100
Round Rock, TX 78683-3100
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