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5 Federal Policy Actions in 2015 That Will Impact Higher Education

January 8, 2016

2015 was an active year, with notable changes in several federal laws and regulations that will directly impact colleges and universities. Here is a recap of some of the biggest policy actions business officers should be aware of, which were covered by NACUBO through newsletters and alerts.

1. IRS Waives Penalties for Missing TINs (August 28, 2015)

For the past two years, NACUBO had urged the Internal Revenue Service (IRS) to waive penalties and suspend the enforcement program penalizing higher education institutions for reporting missing or inaccurate taxpayer identification numbers (TINs) on Forms 1098-T. In August, the IRS agreed to waive penalties assessed against colleges and universities for tax year 2012 and will refrain from issuing penalties for tax years 2013 and 2014. On January 7, 2016, the IRS announced that it will not impose penalties for the 2015 calendar year.

Provisions in the Trade Preferences Extension Act of 2015 will enable higher education institutions to avoid receiving automatic penalties for missing TINs by certifying at the time of filing that they have met the appropriate solicitation standards. Given the January 7 announcement, the measure applies to statements furnished after December 31, 2016.

2. FAFSA Changes to Allow PPY, Will Impact Students, Schools (September 18, 2015)

In September 2015, President Obama announced major changes related to the Free Application for Federal Student Aid (FAFSA) that the administration said will make the process easier and timelier for students and families. The shifts are likely to impact processes at colleges and universities as well.

Families will be able to use income tax data from two years prior—now known as prior-prior year, or PPY—which they will be able to automatically import using the IRS Data Retrieval Tool. By offering the FAFSA three months earlier, families theoretically will receive financial aid information sooner and will have more time to evaluate true college costs and their avenues to pay. For higher education institutions, the timeline shift is likely to impact many internal processes, including when tuition is set and when financial aid decisions are made.

3. ED Launches New College Scorecard (September 21, 2015)

Also in September, President Obama unveiled a new tool for comparing colleges and universities to help students “identify which schools provide the biggest bang for your buck.” The new College Scorecard provides data on completion rates, salaries of former students, debt levels, and more. At the same time, a huge new federal data set was opened to the public.

4. ED Revises Cash Management Rules (November 2, 2015)

Colleges and universities that have arrangements with banks to provide accounts to students, or that use a third-party servicer to pay credit balances to students, face numerous additional requirements under the Department of Education’s new rules. Helpful resources on this topic can be found on NACUBO’s debit cards and campus banking products resource page.

5. Sweeping Year-End Deals Delay Cadillac Tax, Changes 1098-T Reporting, Extends Perkins (December 18, 2015)

On December 18, 2015, President Obama signed into law a $1.1 trillion FY16 omnibus spending bill, which provides funding for the federal government through September 30, 2016. A wide-ranging tax extenders package was combined with the omnibus. Lawmakers also enacted H.R. 3594, the Higher Education Extension Act of 2015, in late December, allowing current and new undergraduate borrowers to receive new Perkins Loans through September 2017 and additional disbursements of loans through the 2017-18 school year.

The deal delays implementation of the Affordable Care Act "Cadillac tax.” It also requires colleges and universities to report payments for qualified tuition and related expenses on IRS Form 1098-T—without an option of reporting amounts billed.
Learn more about this budget and tax deal in our latest NACUBO in Brief podcast.

Looking ahead, NACUBO is awaiting government action on a number of regulatory proposals in 2016, including teacher training, overtime rules, and borrower defenses to repayment of Federal Direct Loans. In its final year, the Obama administration is expected to invest significant effort in pursuing and finalizing its regulatory agenda.

On Capitol Hill, the November elections will take significant media (and lawmaker) attention away from policymaking and turn it to campaign trail politics. Despite the expected rancor, NACUBO is eager to see if there is enough momentum to move forward work on reauthorization of the Higher Education Act (HEA) or comprehensive tax reform. Campus sexual assault policies, accreditation, and proposals to develop a “risk-sharing” or “skin-in-the-game” arrangement in which colleges and universities take on more responsibility related student borrowing are all issues that likely will be a part of HEA reauthorization discussions.


Liz Clark
Senior Director, Federal Affairs