Bills, Laws, Regulations, and Prosperity - OH MY!

by Emily Haynam, Assistant Director of Compliance, The Ohio State University

In light of the Promoting Real Opportunity, Success, and Prosperity through Education Reform Act (PROSPER Act) being introduced in the House of Representatives as the first step in the Higher Education Act reauthorization process, I thought it would be a good time to revisit our civics-class roots and get a refresher on how a bill becomes a law, and why it’s important to us as financial aid professionals.

♪♫♬“I’m just a bill. Yes, I’m only a bill, and I’m sitting here on Capitol Hill… But I know I will be a law someday, at least I hope and pray that I will, but today I am still just a bill…  ” ♪♫♬

I’m guessing some of you over the age of 30, may have watched the Schoolhouse Rock video in a social studies class growing up on how a bill becomes a law.  For all the young’uns out there, here is the video for some fun 70’s cartoon viewing:

Click HERE.   

(PLUG: Additional SNL bonus spoof video at the end!)

We work in a highly regulated field.  We hear folks talk about Title IV this, and federal regulations that… The handbook says… the CFR indicates… Higher Education Act states… It can get confusing fast trying to keep track of all the laws and/or regulations.   For purposes of what we will talk about below, we are focused on the federal process, as states and local governments comes in separate processes.   Just a reminder, though, that the U. S. Constitution and the laws of the United States are the “supreme law of the land”.  State and local laws cannot break federal law – but that is another conversation for another day.  Here we are going to focus on the federal laws and materials financial aid professionals need to know about.

Did you know the Federal Student Aid (FSA) Handbook is not actually the written law?  It’s actually an interpretation of the regulations that were made by the Department of Education to carry out the law.  Sound confusing?  Let’s break it down.  

Law & Order

A federal law is a product of a written statute that is passed by the U.S. Congress.  Legislator(s) create a bill (I’m just a bill♬) that, when passed by a vote of Congress and signed by the President, becomes a statutory law or also referred to as a statute.  Popular examples of laws are the Fair Labor Standards Act (as known as FLSA), the Securities and Exchange Act of 1934, and of course the Higher Education Act of 1965 (HEA).   

The HEA is a law that was originally intended to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education.  The financial assistance for students is covered in Title IV of the HEA, hence where we get this popular reference.   Reauthorization Congress is required of HEA, and it has been reauthorized nine times in total (typically every four to six years).  The ninth reauthorization, however, took 10 years and was completed in 2008.  The tenth reauthorization was scheduled for 2014, but is now several years overdue.  This is where the PROSPER Act comes in.  The PROSPER Act is a House of Representatives bill (H.R. 4508) that is a comprehensive revision to the HEA reauthorization which includes a wide-ranging re-write of legislation.  Areas covered in the bill touch every aspect of higher education – Title IX, Hazing, Voter Registration Forms, Federal Student Aid, etc.   The PROSPER Act is far from complete, and much debate and revisions are expected before a final bill is put to Congress for a vote.  However, as financial aid professionals, since this new law would directly impact federal student aid programs, we need to be paying attention and advocating as appropriate.

So where do the laws go if they are passed?  Laws are written down in an organized manner or “codified” in the United States Code.  This compilation is organized by the U.S. Government Publishing Office (GPO) and was first published in 1926, edited in 1934, with additional editions edited and published every six years since.  Between editions, supplemental materials are added and published in order to keep it current.  Keep in mind the United States Code does not contain state or local laws, or regulations issued by executive branch agencies.

Rules and Regulations

Federal regulations are the standards and rules adopted by the executive departments and agencies of the federal government of the United States that govern how laws will be enforced.  That is where the Department of Education or “ED” comes in for us as financial aid professionals.  ED reviews the Title IV section of the HEA and puts forth proposed administrative regulations to execute the law.  They publish proposed regulations in the Federal Register.   All proposals then go through a process that you may have seen announcements about in the daily NASFAA news called “Negotiated rulemaking” which is often commonly referred to as “Reg Neg”.  Whenever ED wants to add, change or adjust a regulation they will send out a public “Notice of Proposed Rulemaking (NPRM)”.  This is where the government agency gives the opportunity for affected groups and individuals to give public feedback and negotiate the terms of the proposed rule.  All of the public comments are then evaluated for inclusion in the final rule.  ED is required by law to use NPRM, unless the Secretary of Education determines that in doing so is impractical, unnecessary, or contrary to the public interest.  The final rule is then published in the Federal Register.

So why do we as financial aid professionals need to know this process?  For one thing, we need to be proactive in knowing what laws could be passed (e.g., PROSPER Act) that would impact federal student aid regulations.  Then we need to be aware of what changes or new regulations are being proposed by ED and have a voice in the reg neg process that behooves our students and university.   Further, we need to know where to look for answers to ensure we are in compliance. 

Are we done yet…?  Not quite.  From the Federal Register, rules are then codified (or organized in writing) in the Code of Federal Regulations (CFR).  The FSA Handbook is an interpretation by ED to help simplify or put the CFR into layman’s terms for us to more easily execute.  However, the CFR is really our bible of information that we have to follow as financial aid professionals.  When questions come up where there is confusion or gray area, we always look to the CFR to try to nail down the right answer.  The section of the CFR that applies to financial aid is in Title 34, Volumes 3 and 4, Chapters VI and VII, Parts 600 – 799.  Proper citation for where our section starts is 34 CFR 600.  It is not at all pretty or easy to read, which is why the FSA Handbook was created.

If you made it all the way through this article than wow! For a fun bonus video, here is a Saturday Night Live spoof of the bill video:  Click HERE.   (Disclaimer: This is not a political statement, but rather just political satire bringing humor toward both political parties. Viewpoints expressed in the video are not shared as representative of mine personally or any other entity..)

Below is a visual of how a bill becomes a law, and where the PROSPER Act currently sits in the process (click on the image to enlarge) …

Thoughts for 2016 - Federal Issues

Brian Weingert

MASFAA Federal Issues, 2016 Chair

December is normally a great time of year to reflect back on the past year on both the successes and failures. This year seems to be different as I find myself thinking a lot about the upcoming year and what is lurking around the corner. I’m sure everyone has talked about PPY; I guess we are supposed to call it early FAFSA and specified tax year. So I’m thinking about if the updates to our financial aid management system will be ready to begin processing early? When will the cost of attendance be set? When will award letters begin to be sent? How is it going to impact our outreach efforts, when we offer financial aid nights, FAFSA workshops, and College Goal Sunday, and how we are going to communicate these changes to the students and families we serve?

The HEA Reauthorization expired in 2013. Can we expect reauthorization in an election year? Or are we looking at a replay of the 2003 reauthorization where Congress passed 13 extensions until Congress finally passed Reauthorization in 2008? Is reauthorization just going to be more consumer disclosures, more requirements that lead to more regulations and complexity, and more responsibilities for financial aid professionals to remain compliant that takes away time from counseling students?

As you may be aware, beginning with the 2016-2017 FAFSA, schools will no longer be able to see the list of schools that a student lists on the ISIR, except their own school code. What you may not be aware of is beginning with 2017-18, the Department of Education is discussing mixing the order of the schools on the ISIR that is sent to your state grant agency. This is going to impact each state a little differently depending on how your state processes its state aid programs. This may lead some states to develop another application or another process that a student will have to go through to let a state know what school to award their state aid at.

It would be nice to be able to take a moment to reflect on the past year. While those days may be gone, we can definitely say there is hardly a dull moment in financial aid and 2016 is going to be an interesting year for all of us.

MASFAA Washington D.C. Hill Visits – March 12, 2015

The MASFAA Federal Issues Committee held our Washington D.C. Hill Visits on Thursday March 12, 2015. We were able to visit with 18 different offices and all were very receptive of our message.

Attendees:

• Gena Boling, MO
• Roberta Johnson, IA
• Christine Passer, MI
• David Vikander, MN
• Linda Hayes, OH
• Aaron Knapp, WI
• Sarah Soper, IN
• Michelle Wortel, IL

Offices Visited:

• Illinois – Representative Duckworth, Senator Durbin
• Indiana – Congressman Messer
• Iowa – Senator Ernst, Congressman Young, Congressman Blum
• Michigan – Representative Walberg, Congressman Bishop
• Minnesota – Senator Klobuchar, Representative Kline, Senator Franken
• Missouri – Senator McCaskill, Senator Blunt
• Ohio – Senator Brown, Congressman Latta, Representative Gibbs
• Wisconsin – Senator Baldwin, Representative Pocan

Reauthorization

• The top aide for MN Representative Kline (House Chair of Education Committee) related that their main goal is to have a bill on President Obama’s desk by the end of 2015.
• Most offices were doubtful that full Reauthorization would happen in 2015.
• Prior-Prior Year – every member met with was very positive about this and felt there was currently strong bi-partisan support. Very likely that this will be in multiple bills.
• Direct Loan Subsidies and the Federal Perkins Loan Program – there appears to be very strong support for the One Grant, One Loan, and One Work idea. That would eliminate both the Direct Loan Subsidy and Perkins. Their belief is it would cost billions at this point to save Perkins. 
• FAFSA Simplification – most offices appeared to support simplification of the FAFSA itself and making formula revisions to make the need analysis process more equitable for applicants.

Support of Federal Financial Aid Funding

• Federal Pell Grant – we can expect to see proposals for a “Flexible Pell Grant” with some version of “Year Round Pell” again but it sounded like it would not include the “acceleration” clause and the dictation of summer crossover periods.
• Federal Work Study – all members visited recognized the importance of work for students in regards to GPA’s and Graduation Rates. All appeared to support continued funding.

Financial Literacy and Loan Indebtedness

• Simplifying Federal Repayment Programs – there appears to be strong support of making one Standard Repayment Program and One Income Based Repayment Program.
• Early Awareness of Federal Financial Aid Programs – we shared the importance of providing accurate and helpful consumer information disclosures for students and families regarding college cost that is consumer tested. 
• Review of Current Practice of Student Loan Entrance Counseling – most offices were well aware that the current 30 minute online sessions are not meeting the Financial Literacy needs of our students. They were open to ideas of how to make these sessions more impactful.

All About College Ratings

(by the Federal Issues Committee)

On December, 19th, U.S. Department of Education released its draft framework of the Obama Administration's College Ratings plan (see our blog post from that day, titled ED Releases Draft College Ratings Framework), otherwise known as the Postsecondary Institution Ratings System (PIRS). Today, we wanted to provide you with some additional background information:

The U.S. Department of Education has a webpage dedicated to this issue where you can read the release as well as find links to the following:

• a detailed explanation of the ratings system (17 pages),
• blog posts from HomeRoom, the official blog of the U.S. Department of Education,
• a printable fact sheet (6 pages), and
• an opportunity to comment on the draft framework.

Comments on the framework are due by February 17, 2015 and can be submitted on the U.S. Department of Education website or by emailing collegefeedback@ed.gov.

Several commentaries have been posted since the release and all seem to agree that the announcement by ED does not unveil a lot of new information. It more so tells us ED is being held accountable to do something soon, as the President wants implementation before the 2015-16 year. In light of next year's Republican majorities in Congress, where opposition to the proposals is already firm, it is hard to tell from the announcement how realistic implementation will be over the next year.

 "This so-called college ratings system is a fool’s errand and the secretary needs to stop it immediately.”

- House Education and the Workforce Committee Chairman John Kline (R-MN)

“Trying to create yet another complicated, federal system—this time for grading our country's 6,000 colleges and universities—is every bit as impossible and unnecessary as it sounds and is sure to fall flat on its face. Making sure students have access to the information they need to pick the right school is important and something we will discuss during the next reauthorization of the Higher Education Act, but I can’t support letting Washington bureaucrats use taxpayer dollars to fund a higher education popularity contest.”

- Senate Committee on Health, Education, Labor, & Pensions Ranking Member Lamar Alexander (R-TN)

 Here are some suggestions of what you can do:

• Read our December 19th blog post, titled ED Releases Draft College Ratings Framework. This post has some great links to catch up on the news articles and commentary.
• Bookmark ED's College Ratings webpage at www.ed.gov/collegeratings to follow future updates, as well as have quick access to information.
• Share the information and discuss with your colleagues and campus leaders. Have copies of the printable fact sheet available.
• Send a short summary to key stakeholders at your institution soon to begin the conversation.
• Finally, submit comments on the draft by February 17, 2015 and share those thoughts with your state association and MASFAA. MASFAA will be visiting Capitol Hill in Washington D.C. at the end of February and your views should be represented.

MASFAA Federal Issues Update

(by David Vikander, MASFAA Federal Issues Chair)

Federal Midterm Elections

NASFAA has provided a policy update at some of the recent state association conferences in the region. To summarize briefly, the federal midterm elections resulted in the GOP taking control of the Senate, which will result in a shift from the current state of Congress going into the 114th Congress, which will be in effect during the final two years of Barack Obama's presidency. The GOP also increased the majority in the House of Representatives, which is the largest since 1928. The change will result in structural leadership and committee membership changes in both chambers. Some of the high-profile members of Congress who will not be returning are Bishop-NY, Hagen-NC, Harken-IA, Miller-CA, and McKeon-CA.

State Elections Update

In the state by state elections, the GOP control both the House and the Senate in 24 states across the nation. The GOP control 66 of 99 state legislatures. It is possible that this change will result in further reductions in higher education spending at the state levels. Seven states are controlled by the Democrats, which is the fewest since the Civil War. New investments in higher education are unlikely and the GOP will likely stall the College Ranking System.

Click here for interactive map from the National Conference of State Legislatures.

GOP 5 Pillars

The GOP released its 5 "Pillars of a Renewed Majority," which can help determine what their highest priorities will be in the 114th Congress:

1. Tax Code
2. Spending Reduction
3. Legal System
4. Regulatory System
5. Education

Reauthorization Update

To briefly summarize, there were several efforts at reauthorization by the 113th Congress this summer, which will need to be introduced to the new Congress, likely in piecemeal before coming together at some point. If you recall, there was a Harkin bill that was over 700 pages. Alexander and Bennet proposed a bi-partisan bill called the FAST Act that focused on FAFSA simplification, and then the House GOP proposed a bill. We could see little action during the lame duck session of Congress on reauthorization. Harkin may try to push his bill through*, but it is unlikely to move. We could see real movement on reauthorization in March or April 2015. Full reauthorization at that point is unlikely in 2015, but will be active discussion.

*Since this post was originally drafted, NASFAA policy and federal relations staff posted a policy update, titled "Senate HELP Committee Introduces Final Higher Education Affordability Act Reauthorization Bill."