CG Today Online News

March 18, 2008 – 3:09 p.m.
By Libby George, CQ Staff
House and Senate negotiators have pushed off completion of a Higher Education Act overhaul until after the March recess, but interest groups representing students, colleges and state officials aren’t just whiling the time away. They’re furiously lobbying over provisions that still hang in the balance.
Not surprisingly, much of the haggling boils down to money: who pays what for this or that, whether it’s necessary and who has to know about it.
The stakes are considerable. It’s been 10 years since a full renewal of the nation’s primary higher education law (PL 105-244) — 10 years since interest groups have had the chance to change the massive law. And even though the current rewrite would technically expire in five years, most in the higher education world believe a bill cleared this year will end up being the law of the land for at least another decade.
The House and Senate versions of the bills (HR 4137, S1642) are strikingly bipartisan. The Senate passed its version by 95-0 last July; the House passed its measure last month by 354-58.
Some issues that for years were controversial, like the idea of tracking college tuition costs and establishing “watch lists” of seemingly excessive tuition hikes, are by now broadly accepted by the key players: House Education and Labor Chairman George Miller , D-Calif., ranking House Republican Howard P. “Buck” McKeon of California and Senate bill sponsor Edward M. Kennedy , D-Mass.
But a few proposals are still being fought over—hard. Partly for that reason, Congress has passed four extensions of the existing higher education law. The current one (S 2733) expires April 30.
State Funding
The biggest ongoing battle is over a provision dubbed “maintenance of effort,” which is in the House version but not the Senate rendering.
The language would penalize states that cut their contributions to higher education for any academic year to less than the average allocated over the five most recent academic years, although the secretary of education could waive the requirement in some circumstances.
The National Governors Association and the National Conference of State Legislatures have been working overtime to get the language out. They note that states, unlike the federal government, must balance their budgets every year. States faced with penalties for paring funding in tough times would be reluctant to boost investments in higher education during good times, the groups say. On March 10, the NGA sent a letter opposing the provision, signed by 44 governors, to House members.
“To have 44 governors sign on to something is a pretty big deal.” said NGA spokeswoman Jodi Omear.
But many in the House remain committed to the provision, and they have some help from student groups. Luke Swarthout, a higher education associate at U.S. Public Interest Research Group, which lobbies for students, said his group is talking to members about keeping the language.
“States are clearly a major player in public higher education,” Swarthout said. “The idea is to make sure all players . . . have a consistent funding level.”
Even if the language is removed, which appears likely given the fact that the administration also opposes it, House members are unlikely to let the issue die. “The question will be, what is the other answer to get states to do their part?” asked McKeon spokswoman Alexa Marrero.
Textbook Costs, Reports
U.S. PIRG and the U.S. Student Association, a coalition of student governments and student leaders nationwide, are also siding with the House on another controversial issue: textbook costs. Language that would require publishers to disclose textbook costs to professors and sell books unbundled — without CDs or other expensive extras — is widely accepted. But university groups are opposing a related provision that would require schools to provide the prices when students register for classes.
The American Council on Education, in an 11-page letter sent with 13 other higher education groups, said it “strongly opposes” that language, which is “very likely to have unanticipated consequences.” ACE argues that requiring such data to be provided with class schedules would delay the availlability of registration information, ultimately hurting students.
ACE and other interest groups are even more upset about the ballooning reporting requirements in both bills; according to ACE’s Terry Hartle, there are about 150 new requirements in Senate bill and 225 in the House version. The House plan, for example, would require schools to disclose to the Education Secretary everything from the jobs taken by recent graduates to immunization requirements for meningitis to policies for disposing of computers that once contained student data.
“Obviously, reporting and record keeping is not a free good,” Hartle said. “If you are going to impose new requirements . . . they should do it in a way that is as simple as possible and they should do it only when absolutely necessary.”
On that point, Hartle can expect widespread support—even from Robert Shireman, executive director of the non-profit Project on Student Debt, which works to raise awareness of student debt and what might be done about it. Shireman said he’s “concerened about the level of micromanaging that Congress is doing with the disclosures.”
For-Profit Schools, Bankruptcy
Swarthout and Shireman and others who lobby for students, including the Project on Student Debt, are likely to win some battles as the final bill is drafted. Kennedy said on the Senate floor in early March that one of the key issues for those groups — private loan regulations that are in the House package but not the Senate — will be part of a final deal.
But on other issues, including regulation of for-profit schools and treatment of student loan debt in bankruptcy court, the deck is stacked against them.
For-profit schools, led by the Career College Association, want the final bill to relax restrictions on the amount of revenue they can get from federal aid.
Currently, such schools are allowed to get as much as 90 percent of their funding from federal student aid. But they want the standard of what counts toward the 10 percent relaxed —and are likely to win. Both bills include minor but significant tweaks to the “10 percent” language.
The House bill would allow schools to count funds from tax-sheltered 529 college savings plans, and from certain activities conducted by the school that are necessary for the raining of students, along with some institutional aid and scholarships.
“This has become extremely important the last few months because of the pullback of a lot of lenders from the private marketplace,” said Harris Miller, CCA president. In other words, private loans that have traditionally made up the 10 percent may be more difficult to come by.
Swarthout of U.S. PIRG and Shireman of the Project on Student Debt oppose any change — insisting it would allow disreputable schools to encourage students to take out more and more loans they can’t afford for a degree that may not help them. But even Swarthout said that he doesn’t expect to win, given the number of proprietary school supporters in the Senate. The student groups are also not likely to win another key fight —making it easier for borrowers to “discharge,” or erase, their student loan debt through bankruptcy. Under changes made in a 2005 bankruptcy overhaul (PL 109-8), borrowers can discharge the loans only if they can prove that continuing to pay them imposes an “undue hardship.”
Debt watchdog groups and student advocates want student loans to be eligible for discharge under the same, less onerous, rules as other debt, like credit cards. But after an amendment on the House floor to make that change failed, many lost hope for it to be included in this year’s higher ed legislation. The bankruptcy change is not in the Senate-passed bill either, and Senate rules bar inclusion in a conference agreement of a provision that was not in either the House or Senate version.
“We’d love to see something done on bankruptcy,” Shireman said. “We’re asking for it, but were under no illusion. We’re not really expecting that that will happen.”
For now, negotiators are working through an “informal” conference, with conferees not likely to be appointed formally until a deal is reached. Aides say they will work through the recess, and they hope to prepare an agreement for their bosses by the end of the two-week break. But the April 30 deadline is still pretty tight, and staffers said they would not be surprised if a fifth extension is needed.
“The will to get it done quickly is pretty strong, but I think it would be a pretty heavy lift to get it done,” said the ACE’s Hartle, because the overhaul is “such a massive piece of legislation.”
Even if it all works out on Capitol Hill, there’s still the White House to worry about. At least for now, the Bush administration says it “strongly opposes” both House and Senate versions of the legislation, mostly because both would rescind some of the Education secretary’s authority on accreditation of colleges. But the administraton is also wary of several other provisions, including the controversial “maintenace of effort” language.