The Evolving Higher Ed Act Bill

As Senate debates student aid measure, crackdown on illegal file sharing is softened and amendments fly on private loans and earmarks.
July 24, 2007

When a piece of legislation is on the floor of one of the chambers of Congress, particularly a bill that is ultimately sure to pass, you never know what might get stuck to it. And as the U.S. Senate began work on popular legislation to renew the Higher Education Act Monday, lawmakers sought to use the bill as a vehicle for a wide variety of pet peeves and favored causes -- stopping the explosion of private loans, ending illegal downloading of movies and music, and restricting Congressional earmarks for universities, among them.

Amendments flew so fast and furious, and the situation was so fluid, that it wasn't entirely clear what had happened by early evening Monday when the Senate wrapped up work on the legislation, S. 1642 -- work that is to be continued today. Here's a rundown of the major developments, as they appeared to have ended up:

Illegal file sharing. Late in the afternoon on Monday, the Senate majority leader, Sen. Harry Reid of Nevada, stepped to the dais and said that he was "asking that the Reid amendment be withdrawn." With that statement, college leaders thought that they had beaten back what they perceived to be the most significant and troubling change to the Higher Education Act legislation -- a proposal to crack down on student downloading of copyrighted music and movies, in part, by requiring that institutions show that they are using "technology based" systems to stop such activity.

The Reid amendment also would have required the education secretary to annually identify (and publicly embarrass) the 25 colleges and universities that had in the previous year received the most notices of copyright violations using institutional technology networks.

College officials had lobbied aggressively against the Reid provision, arguing that it would require colleges to buy unproven software or hardware and that it ignored the many efforts that higher education institutions have been taking to attack the problem of illegal downloading. (One Senate aide said he believed that virtually every senator had heard from multiple colleges in their states, a clear sign that higher education groups like Educause and the Association of American Universities had successfully mobilized their members in opposition.)

A letter written by the college presidents and others on the Joint Committee of the Higher Education and Entertainment Communities, organized by the American Council on Education and other groups, expressed "grave concerns" that the amendment would punish top violators by stripping them of the right to award federal financial aid -- though sponsors of the amendment said that idea had been considered but rejected.

If opponents of the Reid proposal breathed a sigh of relief when the senator said Monday afternoon that he was withdrawing the amendment, they probably felt a punch to the gut a few moments later when Senate aides circulated an e-mail message saying that Sen. Edward M. Kennedy (D-Mass.) had agreed to incorporate a modified version of Reid's amendment into the updated version of the "manager's amendment" on which Kennedy, the bill's sponsor, will have the full Senate vote Tuesday morning.

Although the situation was still in a bit of flux late Monday -- the language is not yet written -- an aide to the majority leader said that the new version of Reid's amendment would focus only on requiring colleges to do significantly more reporting to their students about the illegality of unauthorized file sharing of copyright material and the penalties individual violators face if they download illegally, among other things. "It's a disclosure requirement at this point," the Senate aide said, acknowledging that provisions on the list of offending institutions and the new technologies had been dropped in response to disapproval from higher education institutions. (7/24 update: The language in the new version of the Reid amendment would require colleges to (1) warn students that unauthorized distribution of copyrighted material can get them in legal trouble; (2) summarize the federal penalties for such activity; (3) describe the college's policies governing illegal file sharing, including its disciplinary penalties; and (4) describe the steps the institution has taken to prevent and detect such activity on its campus network.)

College officials are unlikely to object to the significantly softened provisions.

Private student loans. The skyrocketing use of private (also called "alternative" or non-federal) loans is a matter of increasing concern to policy makers, and senators were expected to consider two amendments to the Higher Education Act legislation that would affect the private loan market in very different ways. One measure -- sponsored by Sen. Chris Dodd (D-Conn.), who heads the Senate Banking Committee -- would ramp up regulation of providers of private loans, including by restricting lenders from taking into account criteria such as where students go to college in determining the terms of loans they offer.

The Dodd amendment did not get introduced on Monday, though student loan groups anticipate that the senator may still try to attach it to the Higher Education Act legislation on Tuesday.

Senators did debate another proposal Monday that sought a very different approach to limiting the spread of private student loans. Offered by Sen. Sherrod Brown (D-Ohio), the amendment called for creating a new federal "supplemental" loan program as an alternative to, well, alternative loans. Saying that "we in Congress often legislate through the rear-view mirror" -- concocting solutions to problems long after they have emerged -- Brown argued that creating a federal source of loans for students would "create an alternative for the fastest-growing segment" of loans, on which students often pay high interest. Lenders often argue about the benefits of competition, Brown said; shouldn't providers of private loans face competition, too? he asked.

Sen. Michael B. Enzi (R-Wyo.), the senior Republican on the Senate Health, Education, Labor and Pensions Committee, cited both substantive and procedural problems with Brown's amendment. He noted that it had emerged more or less at the last minute, having not been reviewed by either the Senate's education or banking committees, and that it would put the education secretary in the position of setting interest rates on the loan, something the person in that office is unlikely to have the expertise to do.

Enzi also noted that the legislation was opposed both by lenders and by students, with the latter (in a letter sent to senators Monday) criticizing the Brown amendment's plan to eliminate the limits on the amount of federal loans a student can borrow. Those two groups rarely agree, and their opposition, and the general sense that Brown's proposal was just not ready for prime time, probably doomed it. Senators voted it down by a margin of 53 to 38.

Among the other amendments considered (or not) Monday:

  • Sen. Tom Coburn (R-Okla.), an outspoken critic of legislative "earmarks" (federal funds specifically directed to a particular entity or institution by a member of Congress) in general and academic earmarks in particular, drew attention to his pet cause with an amendment that would restrict any college from using federal funds to finance its lobbying activities. College officials objected that the Coburn amendment is unnecessary because federal law already prohibits any college lobbyist from being paid with federal money, a point with which Sen. Edward M. Kennedy (D-Mass.), the lead sponsor of the Higher Education Act legislation, concurred. But he said he would work with Coburn to "address the substantive matter of his amendment," possibly with an alternative amendment to be considered Tuesday.
  • Senators approved, by voice votes, amendments by Sen. Jim DeMint (R-S.C.) to direct the Government Accountability Office to study the feasibility of collecting employment information on graduates of postsecondary education; Sen. John Warner (R-Va.) to create a federal competition for technology funds for historically black colleges, among others; and Sen. Barbara Boxer (D-Calif.) to expand federal funds for 80 Upward Bound programs (a fourth of them programs at historically black colleges) that had lost out on the federal competition for grants this year.
  • One amendment that was expected, but not offered, would have mandated that colleges and universities put the ISBN numbers for all books on course syllabuses early in the process, to expand students' options for buying textbooks in the interest of trying to rein in growing costs. College leaders had complained that the proposal from Sen. Richard Durbin (D-Ill.) was impractical, and Durbin did not bring it forward Monday.

Developments on Accreditation and Transfer of Credit

Although the subject generated little or no discussion on the Senate floor, Kennedy and the other crafters of the Higher Education Act legislation also made a few significant changes in the "manager's amendment" version of the bill that they brought before their colleagues Monday.

The most notable, which college leaders had pushed aggressively, altered the measure's approach to the thorny topics of student learning outcomes and transfer of academic credit, which were the most controversial subjects of Education Department negotiations to consider possible changes in federal rules governing accreditation this spring.

As approved by the Senate education panel last month, the Higher Education Act legislation would have directed colleges to use “empirical evidence” and “external indicators,” “as appropriate," to show how successfully they educate students, in areas such as student retention, course and program completion and graduation, state licensure and job placement (for work-related programs), and enrollment of students in graduate programs. The proposed changes would put into federal statute much of what the Education Department has sought to do in recent months through the regulatory process.

It also called for compelling accrediting agencies to require the colleges they oversee to report whether they deny the transfer of a student’s academic credits based solely on the accreditation status of the institution from which the student is transferring. While that isn't as far as officials at for-profit colleges (who argue that academic credits that students earn at nationally accredited institutions are often rejected out of hand) wanted the legislation to go, it was still seen as a victory for them, and leaders of many traditional institutions objected to it.

The version of the bill that Kennedy et. al. brought forward Monday backed away from both of those approaches. On student learning outcomes, it omits a specific requirement that accreditors direct the colleges they oversee to set specific indicators, and puts the development of learning measures much more directly in the hands of individual colleges, where accreditors and university leaders argue that that responsibility belongs.

And on transfer of credit, the Senate bill will still require colleges to publish their policies on transfer of credit, but it no longer requires accreditors to specifically scrutinize whether those policies discriminate against credits earned at nationally accredited institutions.

The Senate will resume work on the Higher Education Act legislation today. In broad outline, the bill will:

  • Set at $6,300 the authorization level to which Congress can raise the maximum amount Pell Grant. But the legislation would provide no funds to assure an actual Pell Grant increase; any such rise could occur only through the budget reconciliation legislation.
  • Significantly increase the amount of information that colleges would be required to report about their costs and prices, and create a “Higher Education Price Increase Watch List” to rank (and publicly embarrass) institutions with tuition and fees that “outpace the applicable price index” for its type of institution. The bill’s approach on college costs would be less punitive to colleges than the approach taken in a parallel House bill.
  • Institute a broad series of restrictions on the relationships between lenders and guarantee agencies and colleges and universities, consistent with many of the changes included in the Student Loan Sunshine Act and the code of conduct that New York’s attorney general, Andrew M. Cuomo, has promulgated. Among other changes, the Senate bill would phase out the “school as lender” program by 2011, but unlike other legislative proposals circulating in Washington, it would continue to allow banks to make philanthropic contributions to colleges that are unrelated to their financial aid programs.
  • Open the Academic Competitiveness Grant Program (which heretofore has been restricted to full-time students in degree-granting programs) to students attending college at least half time and to those in certificate programs. The current restrictions on the program have been particularly nettlesome to community college officials, which have many such students. “The Senate legislation removes the unfair and anachronistic barriers to program participation that have helped make ACGs so unpopular on our campuses,” said David S. Baime, vice president for government relations at the American Association of Community Colleges. The bill would also lift a restriction that limited the grants (and the parallel SMART Grants) to American-born citizens.
  • Ease the requirement that for-profit colleges derive at least 10 percent of their revenue from sources other than federal financial aid funds, by expanding the sources of funds that the institutions may count in the 10 percent figure (additions include funds from 529 savings plans and institutional aid, among others).
  • Prohibit the Education Department from establishing a national database of student academic records, though it permits states and consortiums of states to do so, which is the direction federal and state policy makers seem to be moving in anyway.
  • Institute a broad array of changes aimed at simplifying the Free Application for Federal Student Aid and the process of applying for federal financial assistance.
  • Require international studies programs applying for federal funds to explain how they “will reflect diverse perspectives and a wide range of views” and how they will deal with disputes regarding whether they are meeting that goal.


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