August 10, 2006

• Congress Begins August Recess Leaving Unfinished Business; Secretary's Commission Issues Third Draft Report

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Congress Begins August Recess Leaving Unfinished Business; Secretary's Commission Issues Third Draft Report

The second Session of the 109th Congress adjourned for its annual month long district work period with a rash of legislation left unfinished. The Congress will reconvene on September 5th, only to adjourn on September 29th through the November 7th elections.

While much of the makeup of the remainder of this Congress' agenda will depend on the outcome of the November elections, upon its return next month, the Congress will occupy its three weeks in September with passing the eleven FY 2007 appropriations bills, and continue consideration of legislation concerning lobby reform, port security, expanding Gulf Coast off-shore drilling, Homeland Security, modified line-item veto, internet gambling regulation, immigration reform, pension overhaul, increasing the federal minimum wage, and tax reform.

If the Democrats win a majority of seats in the House or Senate, or both, on November 7th, which will take effect in 110th Congress next year, the Republican leadership may decide to try to push through as much legislation as it can during the remaining weeks of the current Congress in September and, possibly, a lame duck post-election session in December. In which case the Democrats would block as much legislation as they could in order to start over again next year with majority control in the House, Senate, or both. A preview of what this may mean for the reauthorization of the Higher Education Act is included in the Democratic HEA bills S 2573/HR 5150 (Reverse the Raid on Student Aid), S 3255 (The Student Loan Borrower Bill of Rights), and S 3593 (The Student Debt Relief Act). These bills will be refilled next year when the new 110th Congress convenes.

On a related topic, the Secretary of Education's Commission on the Future of Higher Education released the third draft of its final report, findings, and recommendations. This version includes a preamble and conclusion and is, in all likelihood, what the final report will look like when it is released next month.

The report's findings are divided into four areas:

• access;
• affordability;
• quality; and
• accountability.

The recommendations are organized into six areas:

• colleges and universities;
• accrediting bodies and governing boards;
• state and federal policymakers;
• elementary and secondary schools;
• the business community; and
• parents and students.

With respect to the Commission's findings and recommendations concerning access and affordability; this latest draft continues to emphasize the primary barrier to postsecondary education for low income students and families is a:

• lack of academic preparation, followed by;
• lack of information about postsecondary education and the availability of student financial aid, and
• lack of adequate student financial aid targeted at those who are most in need.

This is the reverse of what most other studies have concluded. The Federal Advisory Committee of Student Financial Assistance (ACSFA) — a permanent body established by the Congress in 1986 to advise it on student aid policy — has found in its studies that inadequate funding for need-based student financial aid at the federal and state levels is the primary barrier to entering, persisting, and graduating from college for low income students.

Among the report's recommendations concerning access and affordability are:

• restructure the student financial aid system (federal, state, institutional) and consolidate the federal programs;
• replace the FAFSA with a shorter form;
• appropriate savings achieved through program consolidation into the Pell Grant program;
• repeal the federal unsubsidized student loan program to achieve budgetary savings and rely on the "fully developed" "private sector education lending market" to fill this need. (This recommendation offered by the Commission's chairman, will probably be removed from the next draft, according to the chairman.);
• encourage institutions and states to develop better methods to control and lower costs improve productivity, and enroll more students from underrepresented populations;
• reduce the role of accrediting bodies and state regulations that stifle innovative ways to deliver and expand postsecondary education; and,
• develop a "consumer-oriented database" to offer information on the quality and cost of higher education.

An important point to keep in mind in reading the Commission's report is that any savings that may be achieved through any of the recommendations will be used by the Congress to fund its particular priorities, which will be determined by the leadership and majority. So, for example, savings attributed to program consolidation or repeal of the unsubsidized FFELP and FDLP will not automatically, necessarily, or, in fact in reality, be earmarked or dedicated to the Pell Grant program. Rather, the savings will go to the Treasury to be appropriated by the Congress to finance the federal defense, transportation, commerce, energy homeland security, interior judiciary, housing, labor, health and human services, and, yes, education programs.

Making the mix of federal student financial aid programs and the FAFSA look simpler may not be as much help to low income students and families in accessing postsecondary education as filling the unmet financial need as the ACSFA has pointed out many times.

The recommendation to develop a centralized consumer data base on higher education information has already been established as the College Access Initiative in Section 8023 of S. 1932 (Section 485D of the Higher Education Act).

Repealing the unsubsidized federal student loan program will have the effect of denying many FFELP/FDLP student loan borrowers the protections and benefits associated with these programs, e.g., low interest rates, deferments/forbearances, forgiveness for specific reasons, income sensitive/contingent repayment plans, rewards for good repayment records, etc., that are not necessarily offered by private alternative loan programs; may lead to a situation in which the federal student loan program may include only the highest risk borrowers; and, may lead to increased student loan debt levels for borrowers relying on more expensive private alternative loans with higher loan limits. And, again, any savings generated from this recommendation will not be dedicated to the Pell Grant or Work-Study program.

The full report is available at www.ed.gov/about/bdscomm/list/hiedfuture/reports.html.

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