University of Texas System

Yesterday afternoon, the House Education and Labor Committee approved with amendments H. R. 2669, the College Cost Reduction Act, its budget reconciliation bill, by a vote of 30 to 16. The committee was instructed by the FY2008 Budget Resolution to produce approximately $750 million in mandatory budget savings over the next five years. In addition to creating savings, the legislation was also intended to produce approximately $18 billion in additional funding for student aid.

The reconciliation bill attempts to address the issue of college cost in a number of different ways:

State "maintenance of effort" requirement-As amended, the legislation would require states to fund their public institutions at a certain level; if not, they would be cut off from Leveraging Education Assistance Partnership (LEAP) program funds. The manager's amendment includes language that would allow the Secretary to grant waivers to states hit by natural disasters or an "unforeseen downturn" in its economy.
The bill calls for a number of reporting requirements on institutions whose net and sticker prices increase beyond a certain rate:
For those whose sticker prices increase at a rate faster than twice the consumer price index (CPI) for three years, a report to the Secretary on the causes of the increase would be required. State institutions whose prices are set by outside entities would be required to explain the roles of those agencies in setting the prices.
For those institutions subject to the report described above, there is the possibility of being placed on "affordability alert status" if they do not decrease the rate of increase to less than twice the CPI.
Certain institutions within each "class" of institutions would be exempt:
1) Institutions whose sticker prices are in the lowest quartile of each class; and,
2) if the increase in the sticker price is less than $500.

Institutions would be categorized into different "classes": public, nonprofit private, for-profit, four-year, two-year, less-than-two year.

Institutions whose annual net tuition increases (as a percentage) are greater than the higher education price index would be required to submit to the Secretary within six months: 1) a detailed report on exact causes of the increase; and, 2) cost containment strategies to lower net tuition price.

The bill re-establishes a "higher education price index" (HEPI).

The bill would allocate extra Pell funding to institutions that maintain low tuition.

Institutions that keep their net tuition increases below HEPI would receive extra funds to increase the amount of each Pell award on campus by 25 percent.

Institutions that "guarantee" their net tuition would also see an increase of their aggregate Pell allocation by 25 percent. "Guaranteed tuition" for four-year institutions would mean net tuition increasing for four year at or below the HEPI rate.

Furthermore, in an effort to collect data on college costs, the legislation introduces a potentially new data element: "full year."

In addition to the manager's amendment, the following amendments were adopted:

Tim Bishop (D-NY)-- $100 million in mandatory funds to restore the federal capital contribution (FCC) portion of the Perkins loan program.
John Tierney (D-MA)/John Yarmuth (D-KY)-Would enable the $5,000 in loan forgiveness to be used over a period of five years.
Vern Ehlers (R-MI) (2 amendments)-1) Would authorize a study on distance education; 2) Would encourage colleges and universities to adopt environmentally sustainable practices and to develop academic programs in environmental sustainability.
Susan Davis (D-CA)-Would create a 13-month loan deferment period for reservists and National Guard members.
Tom Petri (R-WI) (2 amendments)-1) Authorize a study that would examine the feasibility of an income contingent repayment collection program via the Internal Revenue Service; 2) To conduct a study on various auction models for market-based reform of FFEL.
Bobby Scott (D-VA)-Continue to fund Upward Bound programs whose funds run out.
Dave Loebsack (D-IA)-Make part-time students eligible for year-round Pell grants
Raul Grijalva (D-AZ)-Make eligibility requirements for ACG and SMART consistent with other Title IV student aid programs with respect to citizenship status.
Scott-Strike the "absolute priority" requirement for Upward Bound
Joe Courtney (D-CT)/Carol Shea-Porter (D-NH)/Danny Davis (D-IL)-Phase in the $500 increase in maximum Pell grant in four years, instead of five years.

A press release and further background materials are available at the following link:

http://www.house.gov/apps/list/speech/edlabor_dem/RelJune13CCRA.html.

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Higher Education Reauthorization
The House passed legislation last week to extend the Higher Education Act through October 31, 2007. The bill, H.R. 2559, was necessary since the current temporary extension will expire at the end of June. The Senate Health, Education, Labor and Pensions Committee has postponed plans to consider reauthorization of the Higher Education Act this week. This mark-up session was postponed to June 20th.

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Immigration
After months of work, the Senate’s bipartisan compromise bill on comprehensive immigration reform collapsed late last week on a procedural vote. Concerns about the proposed temporary guest worker program continued to be one of the main issues of contention. The bill did include several provisions of interest to the education community, specifically the creation of a new F-4 visa category for students pursuing advanced degrees in STEM (science, technology, engineering and mathematics) fields. It also would have created a merit-based point system that would have given advantage to holders of advanced degrees or of a STEM degree at the associate’s level or higher. At this point, it is not clear whether the Senate will take up the bill again any time in the near future. This week Senate negotiators of the broad immigration bill have all but ruled out the idea of an emergency supplemental appropriations bill for border security in favor of an amendment to the bill that would provide $4.4 billion in mandatory funds immediately upon enactment.

On the House side, the Judiciary subcommittee with jurisdiction over immigration held a hearing last Wednesday to determine the business community’s immigrant workforce needs. House leaders had previously said that they would not consider comprehensive immigration reform until after the Senate passes its bill.

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Legislation of Interest

Stem Scholarship Database

The National STEM Scholarship Database Act (H.R. 1051), which would require the Department of Education to create a searchable online database of STEM scholarships and fellowships from both public and private sources, passed the House by voice vote this week. The database would have a separate section for “post-baccalaureate” aid programs.

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Graduate education in advanced energy research

The House unanimously passed the “Green Energy Education Act of 2007” (H.R 1716), which would authorize the Department of Energy to transfer funds to NSF’s Integrative Graduate Education and Research Traineeship (IGERT) program to support graduate education in advanced energy technology research and development. The bill would also support “improving undergraduate or graduate interdisciplinary engineering and architecture education related to the design and construction” of “green” buildings.

Bill text is available through thomas.loc.gov by searching for the bill number; the version listed as “engrossed or passed by House” is the most recent version of the bill.

Support for programs in healthcare informatics

A bill introduced by Congressman David Wu (D-OR) would, among other things, authorize NSF to establish a program to award grants to institutions of higher education to establish or improve undergraduate and master's degree programs in healthcare informatics. The “10,000 Trained by 2010 Act” (H.R. 1467) would allow spending on curriculum development, faculty development, equipment acquisition, and student recruitment. Funding would be authorized at $9 million for FY 08 and similar amounts each year through FY 11.

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Higher education tax credits

Senator Evan Bayh (D-IL) and Representatives Rahm Emanuel (D-IL) and Dave Camp (R-MI) introduced the “Universal Higher Education and Lifetime Learning Act of 2007” in their respective chambers (S. 1501 and H.R. 2458); the bill would amend the tax code to consolidate current income tax incentives for education into one tax credit for higher education expenses. The Hope and Lifetime Learning Credits would be combined with the tuition tax deduction; the partially refundable credit would cover up to $3,000 in qualified expenses including room, board, books and other expenses as well as tuition and fees. The bills have been referred to their respective committees: the Senate Finance Committee and the House Ways & Means Committee.

The bills are available at thomas.loc.gov by searching for “S. 1501” or “H.R. 2458

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FY08 Appropriations

Senate sets 302(b) Subcommittee allocations

The Senate Appropriations Committee today released its 302(b) subcommittee allocations, providing increases for its 12 spending bills similar to those proposed by House Democrats. The overall spending cap of $953 billion is $20 billion above President Bush’s requests before scoring adjustments and advance appropriations, which bulk up that figure by another $3 billion.

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Full Committee Mark Up of Labor-HHS Bill Postponed

The markup of the FY2008 Labor-HHS-Education Appropriations Bill by the full Appropriations Committee, originally scheduled for this week, has been postponed. A new date has not yet been set.

The House Appropriations subcommittee on Labor, Health and Human Services, and Education approved spending allocations for Fiscal Year 2008 last week. Overall, the spending measure would allocate over $10 billion more than the Administration’s request and would increase FY08 funding by 4.6% over current FY07 levels. The Pell Grant program would see the largest increase, 14.6%, of any program in the committee’s jurisdiction. The maximum award would increase by $390; combined with a $260 increase approved earlier this year, the maximum grant will be $4,700, after five years without any increase.

The budget for the National Institutes of Health (NIH) would increase by $750 million, a 2.6% increase over current funding; the administration had proposed cutting NIH by over $500 million. While this would be the first increase in four years, the growth is still below the rate of inflation.
Appropriations for programs of particular interest to the education community include:

GAANN (Graduate Assistance in Areas of National Need) and Javits Fellowships would both be flat-funded, for the sixth year in a row.
TRIO programs, which include the Ronald E. McNair Postbaccalaureate Achievement Program, would increase by $40 million, or 4.8%, though it is not known how much of the increase would be allocated to the McNair program. The President had requested no increase.
A 9.4% overall increase for International Education and Foreign Language programs. This includes 9.6% growth for Title VI, 7.9% for Fulbright-Hayes, and 12.6% for the Foreign Language Assistance Program.
Historically Black Graduate Institutions would see no increase, although programs for Historically Black Colleges and Hispanic-Serving Institutions would see increases of 4.7% and 4.8%, respectively.
Federal Work Study would grow by $138,000, or 0.014%.

The House State-Foreign Operations Appropriations Subcommittee approved a $34.2 billion FY08 spending bill; while the funding level is lower than the President’s request, educational and cultural exchange programs of concern to the higher education community will not be cut. Subcommittee Chairwoman Nita Lowey’s (D-NY) office noted that the bill would increase funding for the State Department exchange programs by 3% over the Administration’s request.

The House Transportation-Treasury-HUD Appropriations Subcommittee approved a $50.7 billion appropriations bill Monday, restoring much of the funding for housing programs that would be cut under the President’s budget.

The bill (DRAFT), which was approved on a voice vote, includes $30 million in additional funding to increase the number of vouchers for subsidized Section 8 housing by 4,000.

The Community Development Block Grant program, one of HUD's largest initiatives, is funded at $4.18 billion under the subcommittee's bill.

On the transportation front, Te bill delivers a massive increase to the Airport Improvement Program, increasing the infrastructure initiative budget by $85.5 million from FY07 for a total of $3.6 billion in FY08. Aviation security funding is also increased by $20 million.

More information is available at: appropriations.house.gov/

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Of Note

The U.S. State Department recently issued a proposed rule change within the J-1 visa category for students. Under the new rule, a foreign student who is attending an accredited postsecondary institution outside the U.S. or who has completed a program of study in the past 12 months, could participate in internship programs in the U.S. for up to one year per degree level. The internship, either paid or unpaid, must be a required part of the degree program and related to the student’s program of study. The new rule would exclude any child or patient care work as well as several other areas; some schools have expressed concern that this exclusion might prevent students with a legitimate need for practical experience in those subject areas from participating.

Comments on the proposed rule will be accepted until August 6, 2007. More information is available from the Federal Register notice by going to www.gpoaccess.gov/fr/ and searching for “page 31008”.

Senate Health, Education, Labor and Pensions Chairman Kennedy released a report on the student loan industry today that faults private lenders for forging cozy relationships with college financial aid administrators to gain exclusive spots on so-called preferred provider lists that schools give to incoming students and their families. Kennedy's report, which focuses on the government-run Federal Family Education Loan program, points out that private lenders "provided compensation to schools with the expectation, and in some cases an explicit agreement, that the school will give the lenders preferential treatment." The report is also critical of school administrators who "received payments for consulting and other services from FFEL lenders which are on the preferred lender list." Link to the press release: http://help.senate.gov/Maj_press/2007_06_14.pdf

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Upcoming Events

June 18, 2007

U.S. House Commerce-Justice-Science-Transportation-HUD Appropriations
Full Committee Markup

June 19, 2007
U.S. Senate Labor-HHS-Education Appropriations
Subcommittee Markup

U.S. House Science and Technology Committee
Subcommittee on Energy and Environment
Hearing on Solar Energy Technology Research

June 20, 2007
U.S. Senate Help Education Labor and Pensions Committee
Higher Education Act Reauthorization Markup

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