House HEA bill calls for major changes

By CC Daily Staff

How does the new PROSPER Act affect community colleges?

The House Committee on Education and the Workforce on Friday released a 542-page bill to reauthorize the Higher Education Act that would significantly change federal student aid, such as allowing students to tap Pell grants to pay for short-term education programs and permitting colleges to limit students borrowing. It also would require higher education institutions to cover certain portions of student aid if students drop out.

The committee is expected to move quickly on the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act, with a markup and vote likely this week.

The bill would help contain college costs while helping students attain an education to meet requirements of available jobs — that, in turn, would help to grow the economy, according to House Republicans.

“Unfortunately, today’s chaotic maze of federal aid programs, requirements and red tape has driven up college costs and made pursuing and finishing a postsecondary education unworkable for far too many individuals,” stated a fact sheet on the bill. “We are failing the next generation at a time when more businesses are demanding their employees attain postsecondary credentials to fill technical, high-skill, good-paying jobs.”

House Democrats quickly criticized the bill. Houser Minority Leader Nancy Pelosi (D-California) said in a press release that the legislation “pulls the rug out from borrowers and gives unfettered access to federal funding with no accountability.” She added that the end result will make college more expensive for low-income students.

Community college advocates are reviewing the legislation, which has good and bad news. Expanding Pell eligibility for short-term programs and allowing colleges to limit borrowing were among the top legislative priorities for the American Association of Community Colleges (AACC). However, AACC is opposed to making colleges financially responsible for students who receive federal aid but then drop out.

More changes to Pell

The House bill would streamline student aid programs into one grant program, one loan program and one work-study program, according to its accompanying fact sheet. The legislation would reauthorize the Pell program through fiscal year 2024 and require colleges to disburse grants to students on a weekly or monthly basis. “Similar to a paycheck,” the fact sheet said.

To encourage students to complete college on time, the bill would offer a $300 Pell bonus to students who take 15 credits per semester in an award year, according to the bill’s fact sheet. In an effort to curb student aid fraud, the bill would prohibit students who have received a Pell grant for three payment periods but have never completed any credit hours or their equivalencies from getting more Pell money.

To help students understand federal student aid rules, responsibilities and guidelines, all students receiving federal student aid would have to go through enhanced financial aid counseling. It includes for the first time Pell recipients and parent borrowers. Students receiving Pell grants would be required to receive counseling annually.

FAFSA, dashboard and gainful employment

The bill weaves workforce education through various programs. For example, it would create a new apprenticeship program and reform the work-study program. It also follows on the promise of the committee — and U.S. Education Secretary Betsy DeVos — to make it easier to apply for federal student aid by streamlining the application form.

The education secretary also would be required under the bill to create an online “College Dashboard” to provide students and their families with basic information about schools, including average debt of borrowers at graduation and average salary of graduates five and 10 years out.

The question of whether schools prepare students for “gainful employment” has been a big issue in the for-profit college industry, and they have affected community colleges, too. Former students at for-profit schools have filed requests with the U.S. Education Department (ED) for student loan forgiveness, claiming the schools didn’t prepare them for jobs that would enable them to pay back their student loans. The department under DeVos has delayed action on those requests while rules on the so-called “borrower’s defense” claims are rewritten.

The legislation released Friday repeals the gainful employment requirement for schools participating in federal financial aid programs and bars the education secretary from reinstating it. ED holds its first round of negotiated rulemaking that pertains to gainful employment this week.

Associated Press reports were used in this article.

This was originally published in CC Daily.