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PROSPER Act: The House Higher Education Act Reauthorization Bill

December 15, 2017 Teri Lyn Hinds NASPA

The Higher Education Act (HEA) of 1965, signed into law by President Lyndon Johnson, was originally intended to expand the federal government’s role in higher education policy, including provision of federal financial assistance to students, specifically those from lower- and middle-income families. Over the last 52 years, HEA has been reauthorized by Congress 9 times, typically every 4-6 years, though the ninth reauthorization was completed in 2008, 10 years after the prior reauthorization. The tenth reauthorization was scheduled for 2014 and is now several years overdue, though Congressional leaders in both the House and the Senate have indicated it is a priority for them to complete in this Congress. To accomplish that, Representative Virginia Foxx, Chair of the House Committee on Education and Workforce (Ed and Workforce), introduced a comprehensive revision to HEA on December 1, 2017: the “Promoting Real Opportunity, Success, and Prosperity through Education Reform Act” (PROSPER Act).

 Though the Ed and Workforce Committee, and its Higher Education and Workforce Development Subcommittee, held a number of hearings and passed several smaller pieces of legislation in previous Congressional sessions, the PROSPER Act represents a wide-ranging re-write of the legislation governing higher education including many provisions that will directly affect student affairs and student success. At nearly 600 pages, it is impossible to summarize all aspects of the legislation, though this post will highlight many of those most likely to be of interest to student affairs professionals, review the unconventionally fast process by which the bill was referred to the full House floor, and provide an expected timeline for a companion bill in the Senate.

Key Provisions of PROSPER for Student Affairs Professionals

The PROSPER Act makes some drastic revisions to several student aid programs. The existing federal loan program would be removed and replaced with the ONE Loan program for undergraduate and graduate students and parents. The ONE Loan program would eliminate both origination fees for federal student loans, reducing up-front costs for students who borrow, but also federal subsidies that pay interest on loans while a borrower is in school, increasing costs for students. The two provisions appear to be intended to balance each other, but ultimately mean students who borrow will pay more. An analysis completed by the American Council on Education (ACE) determined that an undergraduate student who borrows $19,000 over four years and makes all payments on time would see a 44 percent increase in the cost of the loan.

As noted by ACE, this change would hit graduate students especially hard when combined with changes that would remove their eligibility for Federal Work-Study and which would cap their annual and lifetime borrowing limits. The ONE Loan program would include annual and lifetime borrowing caps (though the caps would be higher than current caps for undergraduate students, graduate student loans are not currently capped). The bill also allows financial aid administrators to limit borrower indebtedness by imposing institutional caps on loan amounts, but there is some concern that these limits may force students and families to the private sector to fund their educations.

In addition to origination changes, repayment options are simplified in the PROSPER Act. A single income-based repayment (IBR) program would be created that would allow no loan forgiveness after a certain number of years, but which would cap the repayment amount to that which would have been paid under a standard 10-year amortization plan. The Supplemental Education Opportunity Grants (SEOG) and the Public Service Loan Forgiveness (PSLF) program would also be eliminated.

In keeping with long-standing Republican Party principles, there are several areas in PROSPER where regulation and consumer protections are rolled back or eliminated. In a move even conservative higher education advocates from the American Enterprise Institute (AEI) question, the House bill removes the 90/10 rule, which requires that for-profit institutions receive no more than 90% of their revenue from federal student aid. As noted by AEI, while the 90/10 rule is less than ideal, it has a strong foundation and repealing it without “a sensible replacement” is questionable. Both the gainful employment and borrower defense rules, which are designed to protect consumers from fraudulent actors, are similarly eliminated, though given recent actions by Secretary of Education Betsy DeVos, the future of both the rules was already considered uncertain.

The PROSPER Act also makes changes to Title IX, specifically allowing campuses to halt sexual assault investigations at the request of police investigating a criminal inquiry, which advocates fear will create a disincentive for survivors to initiate criminal proceedings. The bill also includes language that would codify the changes in guidance regarding sexual assault adjudication released by ED earlier this year to allow campuses flexibility in setting evidentiary standards.

Additional provisions of the bill weaken institutional ability to combat hazing on campus and promote civic engagement for students. There is language introduced in the manager’s amendment, a Committee sponsored amendment to legislation consolidating a number of individual amendments, which would prohibit institutions from regulating the timing of recruitment, which institutions have identified as a way to possibly curb hazing incidents. Removed from statute is language requiring institutions to make voter registration forms widely available, suggested timelines by which voter registration forms should be made available, and guidelines directing institutions to send an email to students with only election information. An amendment, which NASPA supported, to restore the language was defeated during the mark-up hearing on Tuesday.

Implications of the House Process

As should be clear, the areas covered in the PROSPER Act are vast and far-reaching, touching on every aspect of higher education. For legislation of such magnitude, the unusually fast pace with which it was pushed through the Ed and Workforce Committee is both concerning and problematic. As noted by NASPA, ACE, and other higher education associations, the bill was prepared behind closed doors with little to no opportunity for association input, and then rushed almost immediately to mark-up, preventing legislators from seeking or providing input on key provisions prior to having to vote on the legislation. This means that even potentially promising aspects of the bill, such as a $300 Pell bonus for students who are accumulating sufficient credits for on-time completion or provisions that would provide program-level employment and earnings outcomes may suffer from unintended consequences that could be avoided with a few simple tweaks.

While there are a number of provisions in the PROSPER Act that are concerning for student affairs, it’s important to remember that this is only the first stage of the process for completing reauthorization of HEA. During the 14-hour markup hearing on the PROSPER Act, 60 amendments were considered, most of which were offered by Democrat members and defeated along party lines. It is likely that some or all of those amendments, and others yet to be written, will be offered again when the bill is debated on the full House floor where they may stand a better chance of passage.

Expected HEA Timeline in the Senate

We have not yet seen companion legislation to reauthorize HEA from the Senate Committee on Higher Education, Labor, and Pensions (HELP), Senator Lamar Alexander, HELP Committee chair, has indicated it will be among his top priorities in 2018. Though the House Ed & Workforce Committee held a number of hearings throughout the year, the Senate HELP Committee has so far had only one – on FAFSA simplification – in late November. Until we see both pieces of legislation, however, we will not be able to tell how close the two chambers are and make better estimates about what is likely to be included in a final bill.

NASPA is committed to efforts that influence policies to facilitate the ability of students and families to make informed choices and those that increase college affordability, increase access and availability of financial aid, and decrease student indebtedness, particularly for students from backgrounds that have had fewer resources to support college preparation and access. As Congress engages in hearings and drafting legislation for the reauthorization of the Higher Education Act, we will continue to advocate for policies that will best support student success and completion. Interested in joining us in DC in July, 2018 to help? Check out NASPA Hill Days and apply by February 16, 2018.