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NACUBO Responds to HEA Reauthorization Discussion Draft

September 5, 2014

On August 29, NACUBO endorsed a letter to Sen. Tom Harkin (D-IA), chairman of the Senate Committee on Health, Education, Labor and Pensions, commenting on a discussion draft for the upcoming reauthorization of the Higher Education Act (HEA).

The American Council on Education authored the response, which was endorsed by 20 other higher education groups, including NACUBO. The letter addresses provisions in the draft that garnered support, as well as provisions that raised concerns, and makes clear that it focuses only on issues with broad consensus among the associations.

There are a score of provisions with widespread support which include, for example, Section 411, which authorizes the restoration of a year-round Pell Grant; Sections 488, 491, and 1016, which would require institutional certification of private student loans; and Section 490 which would allow for a competency-based education demonstration program.

However, even more numerous are provisions of concern to the higher education associations. Of note to NACUBO members is the reaction to Harkin's proposed Code of Conduct in Affiliated Consumer Financial Products or Services (Section 125). The letter states:

Colleges and universities are constantly exploring ways to offer improved services to students and their parents, as well as find savings in their own budgets. We fully agree that colleges and universities need to ensure that students' consumer interests are protected. However, this section seems poorly targeted, and does not acknowledge that well-structured arrangements can provide benefits to students, such as making banking faster, safer, less expensive and more convenient. Such restrictions and the prohibition on revenue-sharing arrangements of any kind would limit ongoing efforts to hold tuition and administrative expenses down and hinder the ability of colleges and universities to develop alternative ways to provide cost-effective services to students.

The language for Section 125 is identical to that proposed in separate legislation introduced by Harkin calling for regulation of agreements between colleges and universities and financial institutions that involve student bank accounts or debit cards, S. 2385, the Protecting Aid for Students Act of 2014.

The letter emphasizes concerns with the regulatory burden already imposed on institutions, explaining, "There is a sizable and complex federal regulatory structure and its impact on U.S. colleges and universities is significant, with substantial compliance costs and challenges for institutions and little evidence that new requirements placed on institutions provide any further benefits to taxpayers." It continues, "We are concerned that the discussion draft includes a substantial number of new requirements, but does not eliminate any existing ones."

Further and final action on HEA reauthorization is not expected to be swift. Harkin intends to retire at the end of this term. The balance of power in the Senate is in question and could possibly change hands following the upcoming November elections. Such a change would place Sen. Lamar Alexander (R-TN) in the chairmanship of the Senate Health, Education, Labor and Pensions Committee (HELP), the committee which oversees HEA reauthorization. Additionally, there will be significant changes in the House Education and the Workforce Committee, as Rep. George Miller (D-CA) will also retire. Rep. Bobby Scott (D-VA) is expected to become the lead Democrat on that committee. Current partisan divides and intra-party squabbles on Capitol Hill, combined with considerable member and staff turnover (on committees and in personal offices), will significantly slow the reauthorization process.

Contact

Liz Clark
Director, Federal Affairs
202.861.2553
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