federal legislative and regulatory update

Federal Legislative and Regulatory Update


Pearson Learning Summit – Spring 2012

The Phoenix Marriott Tempe at The ButtesFriday, April 27th

8:30 AM


Brian Newman, [email protected]

Tom E. Netting, Akerman Senterfitt [email protected]

Karen Allanson, Pearson Learning [email protected]

mailto:[email protected]




193

POLITICAL ENVIRONMENT

THE RACES: 2012 - 2014

OFFICE 2012 2013/2014

U.S. Senate33

23 Dem, 10 GOP

33 20 Dem, 13

GOP

Governors11

8 Dem, 3 GOP

3824 GOP, 13 Dem, 1 Ind

Attorneys General

10 6 Dem, 4 GOP

3117 GOP, 14

Dem


2012 U.S. SENATE RACES

Toss Up Races

Massachusetts

Missouri

Montana

Nevada

New Mexico

N. Dakota

Virginia

Wisconsin


Student Loan Neg Reg

• 25 issues

2 of particular interest to PSCUs

• Very technical in natureCreate stand-alone Direct Lending regulations; phase out

FFEL rules no longer needed

• 2 NPRMs IBR, ICR, TPD – final rule by November 1, 2012; effective

July 1, 2013Everything else – Final rule by late January, 2013; effective

July 1, 2014


Closed School Loan Discharges

• Extends the period of time the student may apply for a closed school discharge from 90 days to 120 days

• Adds examples of exceptional circumstances under which the Secretary may extend the 120 day time period


270 Day Delinquency Forbearances

• Loans are technically in default

• Loan holders or the Secretary may, if the delinquency claim has not been paid, grant forbearance to the borrower for up to 120 days to allow the borrower to enter into a rehab plan


Protecting Financial Aid for Students and Taxpayers Act (S. 2296/H.R. 4390)


• Senators Kay Hagan (NC) and Tom Harkin (IA)• Representative Raul Grijalva (AZ)

• The legislation would specifically prohibit an institution of higher education or other postsecondary institution from using “revenues derived from Federal educational assistance funds for recruiting or marketing activities.”

• APSCU CEO Gunderson: “While the bill introduced by Senators Hagan and Harkin applies to all sectors of higher education, it is clearly another attempt by some policy makers to try and put private sector colleges and universities out of business.”

Protecting Our Students and Taxpayers Act POST Act (S. 2032)


• Senator Richard Durbin (IL)

• Establishes an 85/15 metric in the definition of a higher education institution (Section 102 of the HEA) and requires all “federal funds” (including Post 9/11 GI Bill benefits, DOD Tuition Assistance, and Workforce Investment Act (WIA) funding) to be counted in the 85 percent portion of the calculation.

• Strips schools of Title IV funding eligibility after only one year of non-compliance with the 85/15 Rule.

Senate Military & Veterans Education Legislation


S. 2116 – Military and Veterans Education Protection Act• Senator Tom Carper (DE)

S. 2179 – The Military and Veterans Educational Reform Act • Senator James Webb (VA)• GOP Co-sponsor: Scott Brown (MA)

S. 2241 – GI Bill Consumer Awareness Act• Senator Patty Murray (WA)

S. 2206 – GI Educational Freedom Act• Senator Frank Lautenberg (NJ)• GOP Co-sponsors: Scott Brown (MA) and Marco Rubio (FL)

Improving Transparency of Education Opportunities for Veterans Act (H.R. 4057)


• Rep. Gus Bilirakis

Key components:

• Tracking Complaints and Enhanced Counseling

• Bill was the result of a dialogue with the Veterans of Foreign Wars (VFW) that result in a coalition letter to Capitol Hill and the White House.

• Steve Gunderson testified in support of the bill on March 8th.

STATE AUTHORIZATION/CLOCK HOUR

S. 1297 (Burr/Nelson) and H.R. 2117 (Foxx)

• Repeals new Department of Education regulations determining whether a school is eligible to participate in programs under the Higher Education Act of 1965 (HEA) by (1) requiring institutions of higher education and postsecondary vocational institutions (except religious schools) to be legally authorized by the state in which they are situated, (2) delineating what such legal authorization requires of states and schools, and (3) defining "credit hour."

Status:

• House of Representative approved H.R. 2117 on 2/28.

• Vote: 303-114 (69 Democratic Ayes)


CLOCK HOUR ISSUE

• OPE staff are considering an interpretation that if a state has any requirement that an institution provide any information to it relating to the number of clock hours in a program, even if solely to confirm that the program includes sufficient hours to comply with the state’s clock to credit hour conversion ratio, that the program will be considered to be a clock hour program for federal aid purposes.

• In this interpretation, the Department of Education (“DOE”) will not defer to the state’s interpretation as to whether it considers the program to be required to measure student progress in clock hours.


STATE TRENDS

• State Attorney General Advocacy: Kentucky Attorney General Jack Conway Working Group

• Pressure on State Legislatures to become more active due to State Authorization rule and State AG activity

• State and local GR/PR efforts and community outreach by sector continues to be critical


Federal Fiscal Interests Driving Policy Decisions

"Show Me The Money!"


Federal Budget & Appropriations

College Cost Reduction and Access Act

Student Aid and Fiscal Responsibility Act

Consolidated Appropriations Act


Federal Budget & Approps.

House Proposals

•Pell:•Annual Funding – Discretionary•Maximum Award – $5,550•Eligibility –•Income Cap•No Less Than ½ Time•IPA Lowered

•Admin Costs – Repealed•FDSL:•Interest Subsidy – Repealed•In-school•Grace-period

•Savings – Recalculated•Fair Value Accounting

•IBR – Repealed•College Access Challenge Grants – Repealed•Servicer Funding – Discretionary

•DOD/VA:•Tuition Expenses – Capped @ 3%

Senate Proposals

• Fiscal Commission Budget Plan:• Cuts Discretionary Spending

Caps• Strengthens Enforcement

• FDSLP:• Interest Subsidy – Repealed

• In-school• Grace-period


FY2013 Budget Proposals

Federal Budget & Approps

Federal Pell Grants• FY2013 Appropriations


$7 Billion Additional Mandatory Funds

$2 Billion Surplus

• FY2014 Appropriations & Beyond

No Additional Mandatory Funds

Surplus OR Shortfall?

Federal Budget & Approps.


Current Funding of Federal Pell Grants

Unsustainable

Consequences of Federal Fiscal Decisions

Federal Pell Grant

• Establishment & Removal of Year-Round Pell Grants• Revisions of Auto-zero and Income Protection Allowance• Others

Student Loan Interest

• 2 Yr. Elimination of Grace Period


URGENT - July 1, 2012


Elimination of ATB

Doubling of

Student Loan Interest Rates

Ability to Benefit

Shared Goal

•Repeal

Alternatives: •Differ Federal Legislative and Regulatory Update

APSCU, AACS & HEAL Task Forces

Student Loan Interest Rate

Obama Administration Campaign

Republican Observation

s


Cost for One-Year Delay(s)


Student Loan Interest = $6 Billion

ATB = $18 Million

S. 2343


There Are Still Policy Discussions

President's Executive Order

New Negotiated Rulemaking

Gainful Employment


Gainful Employment

October 15th

July 2nd

May

April 27th

SAIG Sign-up

Release of Initial Data

Disclosure Templates

2010-2011 Reporting


What Else Can We Expect

Near-term

• More Introduced Legislation• More Hearings & Mark Ups• Possible Enacted Legislation

Longer-term

• HEA Reauthorization• Budget Reconciliation• Pell Grant Cliff


ATB Ruling – effective July 1, 2012

Ability-to-Benefit - Public Law 112-74 amended HEA section 484(d) to eliminate Federal student aid eligibility for students without a “certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate.” The law makes an exception for students who have completed a secondary school education in a home school setting that is treated as a home school or private school under State law.

Therefore, students who do not have a high school diploma or a recognized equivalent (e.g.,GED), or do not meet the home school requirements, and who first enroll in a program of study on or after July 1, 2012, will not be eligible to receive Title IV student aid. Students will qualify for Title IV student aid under one of the ability-to-benefit (ATB) alternatives if the student was enrolled in a Title IV eligible program prior to July 1, 2012. Those alternatives include the student passing an independently administered, approved ATB test or successfully completing at least six credit hours or 225 clock hours of postsecondary education.


Remaining Options:

o GED® Test

o High School Diploma

o Home School Certification


The GED® Reality

More than 39 million U.S. adults without a high school credential

10.5 Million are age 18-34

1.4 million U.S. high school dropouts annually

~ 770,000 GED®

Candidates

~ 450,000credentials

34Federal Legislative and Regulatory Update

GED® Test Facts

1942

Post-WWII: Assimilation for returning vets

2014

NEW GED TEST

1978-2002: Gradual shift to college readiness

General Educational Development tests

1 in 7 high school credential holders are GED; 1 in 20 college students

Just passing shows level that meets/ exceeds 60% of graduating seniors

A 65-Year History


We know…

Prep with a Practice Test yields better scores

76% pass the GED on 1st attempt

But helping them pass helps them succeed.

$

50% indicate 2-4 yr. college as their post-GED goal

78% go to 2-year College inside the first 3 years of passing

On average they earn $3,500 more a year than non-GED holders

What can happen after a highly supportive learning experience… Something Life Changing

Data from: Crossing the Bridge: GED Credentials and Post-Secondary Educational Outcomes by Becker Patterson, Zhang, Song, Guison-Dowdy-April 2010, GED ® Testing Service (American Council on Education-sponsored study)

Operational Strategies forImplementing GED Prep Programs


Alternate program for schools with ATB students


Low-cost avenue for generating qualified leads


Community Service:Campus resources / build loyalty

Prep – Test – Enroll – 3


Why a Self-Study Test Prep Course?

2009 study of 90,000 GED candidates concluded:

•On average, those who studied individually using a practice test scored the highest.

•The lowest scores were attributed to those who studied in public school without using a practice test.

•Those with the highest pass rate were the individual study candidates who used a practice test.

•Those with the lowest pass rate were the public school candidates who did not take a practice test.

The study “Preparation for and Performance on the GED® Test” by Joseph W. McLaughlin, Gary Skaggs, & Margaret Becker Patterson (GED Testing Service ® Research Study, 2009-2), examined the most and least effective GED prep strategies after surveying more that 90,000 GED candidates in the United States.


Studies show that preparing for the GED with a practice test* results in higher test scores.


The new GED® test in January 2014:

• Joint venture between the American Council on Education and Pearson

• Computer-based testing in Pearson VUE testing centers

• New test aligned with Common Core standards, certifying preparedness for careers and college


Online Resources

• GED Testing Service website:

– www.GEDtestingservice.com• Information about the new assessment:

– www.GEDtestingservice.com/assessment• Information about fraudulent online programs – fake GED®

programs and online high schools

– www.GEDtestingservice.com/fraud


Q&A


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