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 February 2008 Closed School Monthly Report supplied by the Department of Education.

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Reauthorization clears another hurdle

In Shoptalk Online edition 432, we noted that the House Education and Labor Committee had developed a Higher Education Act (HEA) reauthorization bill (HR 4137), and that the full House was expected to vote upon the bill shortly.

Fast forward two months: After a holiday break and several weeks of intense negotiations on an economic stimulus package, Congress has finally turned its attention back to the HEA. Last Thursday, the House voted 354-58 to approve HR 4137, also known as the "College Opportunity and Affordability Act of 2007."

With approved bills from each chamber in hand, a conference committee composed of members of the House and Senate will now work to craft a compromise bill. If successful, an approved bill could reach the president's desk for signing before the current HEA extension expires on March 31.

More information
To access the text of HR 4137, go to Thomas, the U.S. Congress Web site, at http://thomas.loc.gov/. In the space for "Search Bill Text," enter "HR 4137," click on "Bill Number," and click "Search."

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Neg Reg heads toward the finish line

This year's Neg Reg has proceeded at a quick clip — since our last update (see Shoptalk Online edition 438), the TEACH grant team has concluded negotiations and the student loans team has completed the second of three rounds of discussion.

TEACH grant sessions II & III
The second session of TEACH grant negotiations ended January 24; the third and final session occurred February 6-8. Although negotiators on this team were often required to navigate previously-uncharted territory, the committee succeeded in reaching consensus on all issues.

Counseling requirements and service and repayment obligations were critical concerns for all parties, since for those recipients who do not meet the service obligations, the TEACH grant would convert into an unsubsidized Direct Loan. The draft regulations (available on ED's Neg Reg site; see link below) reflect the careful attention negotiators gave to those topics.

Other issues decided by the committee revolve around institutional eligibility, student eligibility, application and administration processes, and permissible circumstances for which the eight-year service period may be suspended.

Loan session II
During the second loan issues session (held February 5-7), negotiators focused a great deal of attention on the new income-based repayment (IBR) plan created by the College Cost Reduction and Access Act (CCRAA). IBR will become available July 1, 2009; discussions so far have centered primarily on calculating the monthly payment amount, documenting eligibility, disclosing information on the availability of IBR to the borrower, and determining which loan payments will be included in the 25 years of repayment required for loan forgiveness.

The loans team also discussed the public service loan forgiveness program, which will provide forgiveness of the outstanding balance of a borrower's eligible Direct loan after 120 payments, if the borrower is employed full-time in a qualifying public service job. Negotiations have so far focused on the definition of full time employment and the loan forgiveness application process.

Negotiators also discussed the definition of family size for the purpose of determining eligibility for the economic hardship deferment, the new active duty military deferment, and the definition of not-for-profit loan holder for the purpose of special allowance payments. ED has not developed draft regulations on federal preemption of state laws. It has also indicated that the development of regulations for the purpose of harmonizing HEROES waivers with other military benefits — one of the original agenda items — will be postponed at this time due to the possibility that additional changes may be made to the statute in upcoming legislation.

What's next
The loans team will hold its third and final meeting March 4-6. Proposed rules for both teams will be published in the Federal Register for public comment as a Notice of Proposed Rulemaking. After public comments have been received and reviewed, final rules will be published in the Federal Register. Shoptalk Online will keep you informed as these events occur.

More information
Please visit ED's "2007-08 Negotiated Rulemaking for Higher Education" Web page at www.ed.gov/policy/highered/reg/hearulemaking/2008/index2008.html for updates on the committees' progress.

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