House Dives In to the Higher Ed Act

Debate is intense over for-profit colleges, but decisions on many issues are forestalled.
July 14, 2005

After preparing for months to confront the most contentious issues in the federal law that governs student aid and other higher education programs, a House of Representatives panel finally took up its bill to renew the Higher Education Act at a much-anticipated session Wednesday -- only to delay most of the difficult decisions.

With several key lawmakers out of town or otherwise unavailable to vote, the Education and the Workforce Subcommittee on 21st Century Competitiveness postponed final votes on every issue on which there was not unanimous agreement until this morning, although some other matters are unlikely to be resolved until the full education committee meets next week.

Of the dozens of issues the subcommittee's members considered during the seven-hour session -- there were 41 amendments in all to H.R. 609, the draft legislation proposed by the subcommittee's Republican leaders -- just seven won full approval. One, offered by Rep. Virginia Foxx (R-N.C.), a former president of Mayland Community College, would bar the U.S. Education Department from creating a planned national database to track students' academic performance. Lawmakers say it would invade individuals' privacy by using personally identifiable information.

Another would set a time limit, of 18 semesters or 27 quarters, on how long a student can receive a Pell Grant.

A third amendment would require all institutions -- as opposed to just for-profit ones, as is now the case -- to receive at least 10 percent of their tuition revenue from sources other than the federal financial aid programs. Career colleges had sought to completely eliminate that requirement, which they ( and Republican leaders) say discriminates against the institutions, but advocates for students argue has been an important tool in preventing fraud and abuse. (The amendment on the "90/10" rule, as it is called, probably passed so easily because it moves for-profit institutions one step toward equal treatment, yet is unlikely to hurt any nonprofit colleges. Still, officials at for-profit institutions were displeased by the vote.)

That was the only one of the many thorny issues involving for-profit institutions, though, that got resolved Wednesday, and those issues provoked the most debate and offer the greatest uncertainty and potential for drama when the subcommittee reconvenes on Thursday morning. 

The Career College Association and other representatives of for-profit institutions have been pushing throughout the two-year-long process of renewing the Higher Education Act for several changes that they say would treat them and their students more fairly and acknowledge their status as mainstream and important providers of higher education -- but that nonprofit colleges have opposed as a power and money grab by for-profit institutions. H.R. 609, the bill drafted by Reps. Howard P. (Buck) McKeon of California and John A. Boehner of Ohio, the chairmen of the higher education subcommittee and the full education committee, respectively, would give the for-profit institutions most of what they wanted. 

The most contentious change it contains would create a "single definition" for an "institution of higher education" in the higher education law, which now has a separate definition for for-profit institutions that lets them participate in the federal grant and loan programs but does not give them access to other pools of federal education money, such as funds that are available to community colleges and institutions that serve significant numbers of minority students under Titles III and V of the Higher Education Act.

"For us to continue to treat the for-profit sector as a separate entity and, in my view, to discriminate against for-profit schools, I think is wrong," Boehner said Wednesday.

But lawmakers -- some in Boehner's own party -- put forward several amendments that would scale back the "single definition" provision or limit its impact. Luis Fortuño, a Republican who represents Puerto Rico, offered a measure that would include for-profit institutions in the single definition but bar them from tapping into the Title III and V funds. Another Republican, Rep. Michael N. Castle of Delaware, proposed another compromise, which would give for-profit institutions access to funds under the Higher Education Act but would ensure that they could not automatically tap into funds that are now available to colleges through other laws that use the Higher Education Act's definition of an "institution of higher education." 

Under the Castle measure, for instance, for-profit institutions would not be able to compete for research grants from the Agriculture Department or the National Institutes of Health unless the laws that govern those grant agencies were specifically amended to allow them to. "It would be irresponsible for us to allow proprietary institutions to compete for federal largess," said Castle. 

The most aggressive challenge, offered by Rep. Betty McCollum (D-Minn.), would stick with current law and retain the separate definition for for-profit institutions. She argued that for-profit institutions could gain access to funds in 100 programs from which they are now barred, and that Congress should not provide more taxpayer funds to institutions who, though they serve students, must emphasize the bottom line "to satisfy stock holders."

All of those amendments will get formal roll call votes on Thursday, and lobbyists for for-profit and nonprofit institutions alike burned up phone lines Wednesday afternoon as they tried to figure out which lawmakers they could count on and who might still be swayed. Republicans hold an 18 to 15 majority on the subcommittee, and while at least one Democrat on the subcommittee, Rep. Carolyn McCarthy of New York, is seen as sympathetic to the for-profit institutions, several Republicans -- including Castle, Vernon J. Ehlers, and Tom Osborne -- are seen as possible defectors away from the Republican majority on this set of issues. But lobbyists for neither side seemed willing to bet the ranch on Thursday's outcome.

Loans and Other Developments

The other set of issues that has been most contentious in the months leading up to the actual consideration of the Higher Education Act legislation this week revolves around student loans, but relatively little was said and done on the loan programs Wednesday. That's because the education committee's Republican leaders have announced in recent days several compromises aimed at resolving disputes with Democrats and at saving the government money.

But it became clear that they have yet to work out all the details of proposals to allow borrowers to consolidate their student loans at either a fixed or variable interest rate or to permanently end a legal loophole that has allowed nonprofit lenders to reap billions of dollars at the government's expense. The panel's leaders said those issues were unlikely to be resolved until the full Education and the Workforce Committee takes up the higher education bill, probably next week.

Although it did not pass because of some confusion over the formal language, Republicans and Democrats were generally agreed on a provision that would rein in a rapidly growing practice that allows colleges themselves to act as providers of loans to their students. Lawmakers and the Government Accountability Office have expressed concern that the "school as lender" program creates a conflict of interest by having colleges both determine whether students qualify for loans and set the price of attending their institutions.

A Republican lawmaker, Rep. Ric Keller of Florida, sought to raise the ceiling on the maximum amount of money available each year to a Pell Grant recipient to $6,000, from $5,800 in the committee leaders' version of the bill.

Three Democratic Representatives, Dale E. Kildee of Michigan, Chris Van Hollen of Maryland, and John Barrow of Georgia, engaged in some one-upsmanship, proposing instead that the subcommittee raise the ceiling (which is meaningless unless Congressional appropriators actually provide enough money each year) to a high of $8,200 in 2012. On this and a few other proposals, Democrats argued repeatedly that the money the Republican-led Congress is pouring into tax cuts and the war in Iraq has forced the committee's leaders to draft a Higher Education Act bill that "represents the single largest cuts in student aid, ever," as Kildee put it.

Boehner, noting that the actual maximum Pell Grant is currently $4,050, said "we can set the authorization level anywhere we want, but I don't think we ought to mislead the American public, knowing it is virtually -- no, not virtually -- it is impossible to ever reach that authorized level."

Perhaps surprisingly, David Horowitz's name was not mentioned (except in the hallways) during Wednesday's markup. The draft legislation introduced by the committee's Republican leaders contained a provision based on last month's statement in which most leading higher education groups sought to stake out a moderate position on Horowitz's Academic Bill of Rights and colleges' intellectual pluralism. The college groups' statement has been derided publicly by union leaders and bemoaned privately by some higher education lobbyists, who think the college groups may have erred by appearing to open the door to Congressional intrusion into academic matters.

But while one Democratic lawmaker had, at the urging of Horowitz opponents, drafted an amendment to strip the new language from the Higher Education Act bill, no such amendment was introduced at Wednesday's marathon session.

On that and other issues, though, who knows what Thursday will bring.


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