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Congress Extends HEA Before Leaving for Elections

October 4, 2006

Congress passed another extension of the Higher Education Act last week, acknowledging that it is unlikely to complete work on the long-overdue reauthorization of the statute in this session. After many of the most pressing provisions were pulled into last year's budget reconciliation bill, the House passed a reauthorization measure in the spring. The Senate, however, did not take it up again. The extension will run until June 30, 2007. Amendments to three provisions were included in HR 6138:

  • to tighten requirements for "eligible lender trustees" acting in concert with institutions of higher education;
  • to remove the requirement that at least 50 percent of Hispanic students be low income for institutions to be eligible for grants for Hispanic-serving institutions, and to eliminate the two-year waitout period before a college can receive a subsequent grant under the program; and
  • to expand loan-cancellation benefits for victims of the 9/11 terrorist attacks.

Disaster Grants.  In other last-minute action, Congress added education to a list of "critical services" operated by nonprofit organizations, which could receive disaster-relief funds from the Federal Emergency Management Agency. Independent institutions were eligible for funds prior to 2000. This provision was included in the annual appropriation bill for Homeland Security, one of only two out of eleven appropriation bills completed before the start of the federal fiscal year.

Expiring Tax Provisions.  Congress failed to extend several tax provisions that expired in December 2005, including two of interest to higher education. The above-the-line deduction for college tuition and the research-and-development tax credits had been included in a bill addressing much more controversial issues of inheritance taxes and the minimum wage, which did not pass.