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House Package of Higher Education Bills Tackles Critical Issues; More Work Needed to Improve Access and Success for Low-Income Students

Jul 28, 2014

By Amy Ellen Duke-Benfield, Tim Harmon, Evelyn Ganzglass, and Elizabeth Lower-Basch

Last week, the House passed four bipartisan higher education bills critical to low-income, non-traditional students. Unlike the Senate, the House Education and Workforce Committee is taking a piecemeal approach to reauthorizing the Higher Education Act, and these bills are part of that plan. The bills address a number of CLASP’s higher education objectives—such as increasing data transparency for students, better targeting of education tax credits to low-income students, and providing greater means for students pursuing competency-based education—but do have shortcomings, particularly for the growing proportion of non-traditional undergraduate students.

H.R. 4983 – Strengthening Transparency in Higher Education Act, passed on Wednesday, would “provide students and families with the information they need to make smart decisions about higher education,” according to Subcommittee on Higher Education and Workforce Training Chairwoman Virginia Foxx. The legislation creates a consumer-tested College Dashboard website that would replace existing Department of Education consumer websites, including the College Scorecard and College Navigator.  The legislation would include two major improvements in currently available consumer information for postsecondary students. First, graduation rates would be publicly reported (not simply disclosed as under current law) for Pell Grant recipients, subsidized Stafford loan borrowers, and students not receiving any federal aid.  Second, the graduation rate data would be provided for non-first-time students, in addition to first-time students, as is currently reported in the Integrated Postsecondary Education Data System IPEDS

In spite of these improvements, a critical shortcoming of the legislation is its approach to post-graduation employment and earnings results.  The bill contains only a requirement to include a link to “national and regional data from the Bureau of Labor Statistics on starting salaries in all major occupations.”  While national and regional salary survey data can be an important part of the context for interpreting post-graduation earnings results, these data alone are hardly a substitute for institution and program-level employment and earnings results for actual graduates.

The Center for Postsecondary and Economic Success at CLASP recently published a working paper on the importance of employment outcome data in improving the transparency of postsecondary education and training. A key finding of this report is that consumers want to know about the post-graduation employment and earnings for recent alumni of postsecondary institutions, because increasing their prospects for stable employment and improved earnings are central to their motivation to enroll in postsecondary instruction.  Leaving students, parents, and the public in the dark about these results would be a big setback for the cause of improved transparency and consumer awareness. 

H.R. 3136 – The Advancing Competency-Based Education Demonstration Project Act, also passed last week, directs the Secretary of Education to implement demonstration projects to explore ways of delivering education and disbursing student financial aid that are based on learning rather than time. The Act authorizes the Secretary to waive statutory and regulatory requirements related to a minimum number of hours of instruction and other restrictions that impede creation of competency-based programs and to conduct an annual evaluation of the demonstration programs.  This legislation is consistent with CLASP's call for a national conversation about moving to a competency-based education, training and credentialing system. 

The House also passed H.R. 4984 – The Empowering Students Through Enhanced Financial Counseling Act,  which requires students participating in federal loan programs to receive counseling each year at the beginning or prior to accepting the student loan and when they exit their program. In addition, it adds to the information that must be provided to students as part of loan counseling. It also requires institutions of higher education to provide financial counseling to Pell Grant recipients.

Finally, H.R. 3393  The Student and Family Tax Simplification Act, which was passed on Thursday, would consolidate four existing education tax credits, including the Hope Credit, the Lifetime Learning Credit, the American Opportunity Tax Credit (AOTC), and the tuition and fees deduction, into one permanent AOTC. When this bill was introduced last fall by Reps. Diane Black (R-TN) and Danny Davis (D-IL), CLASP along with our partners in the Higher Education Tax Reform Consortium had applauded it as an important step forward in simplifying the multiple tax benefits that support higher education and in making these credits more useful to low-income students.  H.R. 3393 would make permanent the partially refundable AOTC and would increase the portion of the credit that is refundable. In addition, it would improve coordination between Pell grants and the AOTC and would ensure that Pell grants are never counted as taxable income. Under the original bill, the costs of the expanded refundability would have been offset by lowering the income eligibility limits for the AOTC and by eliminating the Lifetime Learning Credit. When the bill was brought to the House Ways and Means Committee in June, Chairman Dave Camp (R-MI) amended it to restore the current income limits, which would keep the credit available to higher-income families and increase the cost of the bill by $60 billion over 10 years. The Ways and Means Committee also approved a series of costly bills that would make permanent corporate tax preferences. CLASP has deep concerns about this piecemeal approach, which will make it harder for Congress to eventually come to agreement on a balanced package that includes tax reform and sequester replacement. Moreover, to the extent that new funds are available for higher education, we would prefer as much as possible of these funds to be provided through Pell Grants, rather than tax credits. For more information about this bill, see CLASP’s “Education Tax Credits Bill Takes a Partisan Turn on Way to House Floor.”

CLASP looks forward to working with Congressional staff to improve upon the bills as part of a comprehensive reauthorization of the Higher Education Act.

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