Federal Updates

Closed school corner

The following table provides a list of newly reported school closures and error corrections from the Postsecondary Educational Participants System (PEPS) and from the June 2007 Closed School Monthly Report supplied by the Department of Education.

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A hectic week on the hill

"There are two things you don't want to see being made — sausage and legislation." This comment, attributed to German Chancellor Otto von Bismarck in the 1800s, has never seemed truer for those following Congressional proceedings this week. As members of Congress rushed to debate and vote upon an impressive amount of legislation while preparing to adjourn for the August recess, even seasoned politicians and policymakers could be forgiven for feeling as if they've been put through the grinder. In this article, we will provide a status report on the various pieces of higher education-related legislation working their way through the House and the Senate and offer a look at what may be yet to come.

Bill fatigue
Some of the uncertainty surrounding current legislation is due to the sheer number and variety of bills under consideration. Two types of pending legislation would impact the Higher Education Act (HEA): budget reconciliation, traditionally used as a means to reduce the federal deficit, but also used to increase spending in this case; and reauthorization of the HEA, a mandated and long-overdue periodic review and update of the statute. In both of these categories, the Senate and the House are working to develop and vote upon their versions of bills, which often contain overlapping and conflicting provisions. In addition to HEA-related legislation, fiscal year 2008 budget appropriations for federal financial aid programs are also being debated.

Aside from legislation in Congress, and adding to the confusion, are ED's pending regulatory changes (see Shoptalk Online edition 409), which also propose to make modifications affecting the financial aid community — at times contradictory to changes currently being discussed in Congress.

Reconciliation
HR 2669, the College Cost Reduction Act, is the House reconciliation bill. Approved by the House by a margin of 273 to 149 on July 11, HR 2669 incorporates many of the piecemeal provisions scattered throughout previously-introduced House bills, such as HR 5, HR 472, and HR 1608 — essentially creating a merger of reconciliation and reauthorization measures.

S 1762, the Higher Education Access Act, is the Senate reconciliation bill that addresses many of the sames issues as HR 2669. It was passed on July 20 by a vote of 78 to 18. A conference committee of Senate and House members will work to draft a compromise version of S 1762 and HR 2669.

Reauthorization
As mentioned previously, many of the measures found in various House reauthorization-related bills were encompassed in the House reconciliation bill, HR 2669.

S 1642, the Higher Education Amendments of 2007, is the Senate's comprehensive reauthorization bill. The Senate will presumably use S 1642 as a vehicle for making desired changes to the HEA that would not be accomplished by S 1762. S 1642 was passed by unanimous vote today.

In the event a final reauthorization bill cannot be developed through the conference process before the current HEA extension expires, Rep. George Miller (CA) has introduced yet another HEA extension bill, HR 3122.

What's next
S 1762, S 1642, HR 3043 (the House FY 2008 appropriations bill), and HR 2669 were passed under threat of veto by President Bush. In a series of Statements of Administration Policy, the President cites concerns over excess spending and "other objectionable provisions" and states his intent to veto the bills if presented to him in their current form. In the coming weeks and months, Congress will use the conference process to attempt to integrate the various bills into legislation that is acceptable to all parties. Shoptalk Online will keep you informed of changes as they develop.

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Economic hardship deferment form updated with new federal minimum wage rate

The English and Spanish versions of the Economic Hardship Deferment Request (HRD) form have been updated to reflect the new minimum wage rate that goes into effect today. The updated HRD forms are available on TG Online at www.tgslc.org/forms/frms_def.cfm.

The federal minimum wage is provided on the form for reference when determining borrower eligibility for the deferment. Among other criteria for an economic hardship deferment, a borrower may qualify for the deferment if the borrower is working full time and has a monthly income that does not exceed the greater of the federal minimum wage rate or an amount equal to 100 percent of the poverty line for a family of two. A borrower may also qualify for the deferment if the borrower is not working full time and has a monthly income that does not exceed the greater of two times the federal minimum wage rate or an amount equal to two times the poverty line for a family of two and, after deducting an amount equal to the borrower's federal education debt burden, the remaining amount of that income does not exceed the larger of the federal minimum wage rate or the poverty line for a family of two.

Scheduled changes to federal minimum wage
On May 25, 2007, President Bush signed into law the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, which, among other changes, mandated incremental increases in the federal minimum wage. As of July 24, 2007, the first of three annual increases in the federal minimum wage will take place as follows:

• July 24, 2007 — July 23, 2008: increase from $5.15 per hour to $5.85 per hour
• July 24, 2008 — July 23, 2009: increase from $5.85 per hour to $6.55 per hour
• July 24, 2009 and beyond: increase from $6.55 per hour to $7.25 per hour

More information and questions
For more information about the economic hardship deferment, call TG customer assistance at (800) 845-6267 or send an message to cust.assist@tgslc.org.

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