P.L. 110-84, The College Cost Reduction Act of 2007
- This item is from the 110th Congress (2007-2008) and is no longer current. Comments, voting, and wiki editing have been disabled, and the cost/savings estimate has been frozen.
H.R. 2669 would provide for reconciliation pursuant to section 601 of the concurrent resolution on the budget for fiscal year 2008.
== Detailed Summary ==
College Cost Reduction Act of 2007 -<b> Title I: Investing in Student Aid - Part A: Increasing the Purchasing Power of Pell Grants</b> - (Sec. 101) Amends the Higher Education Act of 1965 (HEA) to reauthorize the Pell Grant program through FY2013. Authorizes and appropriates additional funding for the program for FY2008-FY2017 to increase the amount of the maximum Pell grant for which a student is eligible by $200 for each of the award years 2008-2009 and 2009-2010, $300 for award year 2010-2011, and $500 for each subsequent award year. Increases the authorized maximum Pell grant to $7,600 for academic year 2008-2009 and by $1,000 increments each academic year thereafter until it stands at $11,600 for academic year 2012-2013.
Repeals the formula for calculation of an individual Pell grant which includes, in part, the sum of the student's tuition. (Thus eliminates the "tuition sensitivity provision" which currently prohibits maximum Pell grant awards to students attending low-tuition institutions of higher education even if their income is low enough to otherwise qualify for the maximum award.) Makes $5 million available until October 2008 to cover the costs of eliminating tuition sensitivity.
Allows, beginning in academic year 2009-2010, students who attend year-round institutions of higher education (IHEs) to receive up to two Pell grants in the same academic year.
Makes part-time students and students whose prior enrollment in undergraduate education was part of a secondary school program of study, eligible for Academic Competitiveness grants.
(Sec. 102) Increases students' Pell grant eligibility by increasing the income protection allowance to: (1) $3,750 for a dependent student; (2) $6,690 for an independent student without dependents, other than perhaps a spouse, who is single, separated, or married and both spouses are enrolled; and (3) $10,720 for an independent student without dependents other than a spouse if only one of the couple is enrolled. Provides for cost-of-living adjustments to such amounts, but for each of academic years 2010-2011 and 2011-2012 increases such income protection allowances by 10%.
Increases the income protection allowances in the table for independent students with dependents other than a spouse by 10% for academic year 2009-2010, and for each of the three succeeding academic years.
(Sec. 103) Makes dependent students eligible for a simplified means test if one of their parents is a dislocated worker or they or their parents received a means-tested federal benefit within the past two years. (Currently, one year.) Makes independent students eligible for a simplified means test if they or their spouses are dislocated workers and they have received a means-tested federal benefit within the past two years.
Raises, from $20,000 to $30,000, the zero-expected family contributions income limit which allows students in families with incomes below such limit to qualify for the maximum Pell grant award. Provides for cost-of-living adjustments to such amount.
Includes the dislocated worker status of a family member within the special circumstances giving financial aid administrators extra discretion in making need analyses.
(Sec. 104) Excludes welfare benefits, Earned Income Tax Credits, federal special fuels tax credits, untaxed foreign income, untaxed Social Security benefits, and the additional federal child tax credit from the income and benefits which are considered untaxed and thereby included in student need analyses.
Excludes untaxed distributions from qualified education benefits as income or assets in computing expected family contributions in student aid calculations. Treats a qualified education benefit as: (1) the parent's asset when considering the family contribution for a dependent student; and (2) the student's asset when considering such contribution for independent students. Excludes from need analyses any untaxed distributions from state prepaid tuition plans or Coverdell education savings accounts.
<b>Part B: Making Student Loans More Affordable</b> - (Sec. 111) Phases-in cuts in the interest rate charged undergraduate student borrowers under the Federal Family Education Loan (FFEL) and Direct Loan (DL) programs, thereby reducing such rate from 6.8% in July 2006 to 3.4% in July 2012.
(Sec. 112) Increases FFEL annual loan limits for third and forth year students from $5,500 to $7,500. Increases aggregate limits from $23,000 to $30,500 for undergraduate students and from $65,500 to 73,000 for graduate students.
(Sec. 113) Reduces special allowance payments made to FFEL lenders to compensate them for the difference between FFEL interest rates and market rates.
(Sec. 114) Eliminates exceptional performer status for lenders, servicers, and guaranty agencies, which rewards such entities for high due diligence in FFEL collection.
(Sec. 115) Limits FFEL lender insurance to 95% of the unpaid balance of such loans. (Currently, 97% of a FFEL issued after June 2006 is federally-insured.)
(Sec. 116) Reduces from 23% to 16% the percentage of defaulted FFEL collections a guaranty agency is allowed to retain, beginning in October 2007.
(Sec. 117) Lowers the account maintenance fee paid to FFEL guarantors from .10% to .06% of the original principal amount of active loans they have guaranteed.
(Sec. 118) Increases the loan fee charged FFEL lenders from .5% to 1% of the principal amount of loans disbursed after October 2007, but eliminates the fee for small lenders, nonprofit organizations, and state and local governments. Prohibits its collection from borrowers.
(Sec. 119) Directs the Secretary of Education (Secretary) and the Secretary of the Treasury to conduct a planning study of alternative market-based mechanisms for setting FFEL lenders' yields, which is to be followed by a limited two year pilot program testing the mechanisms which the study found most promising in ensuring loan availability, minimizing administrative complexity, and reducing federal costs. Allows the Secretary to implement on a program-wide basis the auction-based system proven to satisfy such criteria, after an independent evaluation of the pilot program by the General Accountability Office (GAO) .
(Sec. 120) Directs the Secretary to pay to each FFEL guaranty agency, for deposit into their Operating Fund, a monthly delinquency prevention fee equal to 0.0055% of the original principal amount of loans insured by the agency, other than loans in in-school, grace period, or delinquency status.
Sets a minimum aggregate amount of loan processing and origination fees to be paid by the Secretary to FFEL guaranty agencies in any fiscal year.
<b>Part C: Rewarding Service in Repayment</b> - (Sec. 131) Provides student loan forgiveness to borrowers under the FFEL or DL programs who serve full-time in areas of national need as: (1) early childhood educators in low-income communities; (2) nurses; (3) critical foreign language specialists who teach in elementary or secondary schools or use such knowledge as federal employees; (4) librarians; (5) highly qualified teachers who teach bilingual education or who teach in schools that enroll a high proportion of disadvantaged students; (6) child welfare workers; (7) speech language pathologists in elementary or secondary schools; (8) National Service participants; (9) school counselors in elementary and secondary schools that enroll a high proportion of disadvantaged students; and (10) public sector employees.
Provides up to $1,000 of student loan forgiveness for each year of service, but limits forgiveness to $5,000 in the aggregate.
(Sec. 132) Directs the Secretary to forgive the balance due on DLs and direct consolidation loans by individuals who have been public sector employees for 10 years and have made 120 income contingent payments on such loans.
(Sec. 133) Caps FFEL and DL repayments by student borrowers at no more than 15% of the amount a borrower's and the borrower's spouse's adjusted gross income exceeds 150% of the poverty line. Requires the Secretary to cancel or repay such loans after 20 years.
(Sec. 134) Eliminates the three-year limit on the deferral of FFELs, DLs, and Perkins loans when borrowers are suffering economic hardship, redefined to include borrowers whose full-time earnings do not exceed 150% of the poverty line. Includes such deferral periods, as well as the months a borrower's FFEL or DL payments are capped, in calculating the maximum period an income contingent repayment plan may be in effect for a non-defaulting borrower.
(Sec. 137) Allows veterans who were called to active duty when enrolled in, or within six months of being enrolled in, an IHE to receive a 13 month student loan deferment. Cancels such deferment upon the borrower's reenrollment in school.
<b>Part D: Sustaining the Perkins Loan Program</b> - (Sec. 141) Appropriates an additional $100 million for each of FY2008-FY2012 for contributions to Perkins Loan funds.
<b>Title II: Reducing the Cost of College - </b> (Sec. 201) Directs the Commissioner of Education Statistics, in redesigning the College Opportunity On-Line (COOL) website, to identify and include the data of greatest importance to prospective and enrolled students, and their families. Requires such website also to provide comparable information and a sorting function that permits users to customize their search for and comparison of IHEs.
Requires the Secretary to publish, on such website, additional college affordability information that includes sticker prices for the five most recent academic years and an IHE's net tuition (tuition and fees, minus student grant amounts) for the most recent academic year for which data are available.
Requires a school whose prices increase at more than twice the percentage change in the HEPI over a three-year period to report an explanation to the Secretary. Places schools on affordability alert status if their prices continue to exceed the HEPI by such amount for two additional years. Requires publication of such explanatory reports on the COOL website.
(Sec. 202) Establishes a new HEA title VIII, Restraining Tuition Increases.
Establishes a five-year cooperative education grant program providing matching grants to IHEs to increase the availability and quality of programs offering students alternating or parallel periods of academic study and remunerative employment related to their academic or occupational objectives.
Reduces, by yearly 15% increments, the federal share of cooperative education grants from 85% in the grant's first year to 25% in the fifth and final year of the grant.
Authorizes the Secretary to use a portion of program funds for: (1) demonstration projects to determine the feasibility or value of innovation methods of cooperative education; and (2) cooperative education training and resource centers.
Makes $15 million available for each of FY2008-FY2012 to carry out title VIII.
Directs the Secretary to award competitive grants to IHEs that, for academic year 2008-2009 or any succeeding academic year, have an annual net tuition increase for the most recent academic year by no more than the percentage change in the HEPI for such academic year. Requires IHEs to distribute such funds as need-based grant aid to students who are eligible for Pell grants.
Provides bonus amounts to IHEs that guarantee to keep their tuition increases at no more than the increase in the HEPI. Requires IHEs to provide such bonus amounts to students who are eligible for Pell grants.
Requires IHEs whose net tuition increase exceeds the HEPI increase for an academic year to report to the Secretary and Congress regarding the causes of such increase and voluntary actions they are taking to reduce net tuition.
Gives grant and bonus priority to IHEs with the lowest annual net tuition increases.
Makes $15 million available for each of FY2008-FY2012 for such grants and bonus amounts.
<b>Title III: Ensuring a Highly Qualified Teacher in Every Classroom - Part A: TEACH Grants</b> - (Sec. 301) Establishes a TEACH Grant program providing $4,000 of tuition assistance each academic year to high-achieving undergraduate, post-baccalaureate, and graduate students who commit to teaching a high-need subject in a high-need elementary or secondary school for four years. Includes mathematics, science, foreign languages, bilingual education, special education, and reading among such high-need subjects.
Provides $500 Bonus TEACH Grants each academic year to students who are eligible for TEACH Grants and enroll in a Teacher Preparation program that is implemented by an IHE in partnership with high-need LEAs and schools and offers a baccalaureate degree, post-baccalaureate teacher credential, or graduate degree and concurrent teacher certification in science, technology fields, special education, foreign language, engineering, and English language instruction.
Sets aggregate limits on an individual's receipt of TEACH Grants and Bonus TEACH Grants.
<b>Part B: Centers of Excellence</b> - (Sec. 311) Awards competitive grants to minority-serving IHEs to establish centers of excellence that improve the preparation and support of highly-qualified teachers by: (1) implementing reforms within teacher preparation programs to ensure that teachers are able to understand scientifically-based research and use advanced technology effectively; (2) providing sustained and high-quality preservice clinical experience; (3) developing and implementing initiatives to promote the retention of such teachers; (4) awarding financial need scholarships for participation in teacher preparation programs; and (5) disseminating information on effective teacher preparation practices.
Makes $50 million available from FY2008-FY2012 for centers of excellence.
<b>Title IV: Leveraging Funds to Increase College Access - Part A: Strengthening Historically Black Colleges and Universities and Minority-Serving Institutions</b> - (Sec. 401) Makes $100 million for each of FY2008-FY2012 available to minority-serving institutions, with: (1) 40% going to Hispanic-serving institutions; (2) 40% going to Historically Black Colleges and Universities and Predominantly Black institutions; and (3) 20% going to Tribal Colleges and Universities, Alaska Native and Native Hawaiian-serving institutions, and Asian and Pacific Islander-serving institutions.
Defines Predominantly Black institutions as accredited institutions serving at least 1,000 undergraduate students at least: (1) 50% of whom are pursuing a bachelor's or associate's degree; (2) 40% of whom are Black Americans; and (3) 50% of whom are low-income or first-generation college students. Requires the spending per full-time undergraduate student of such institutions to be low in comparison to that of institutions offering similar instruction.
Defines Asian and Pacific Islander-serving institutions as accredited institutions that have a significant enrollment of financially needy students and an enrollment of undergraduate students that are at least 10% Asian American and Pacific Islander students from subgroups with low levels of college degree attainment. Requires the spending per full-time undergraduate student of such institutions to be low in comparison to that of institutions offering similar instruction.
Requires that funds for Predominantly Black institutions be available for competitive grants for programs in science, technology, engineering, mathematics, health education, international affairs, teacher preparation, or to improve the educational outcomes of African American males.
Requires that funds for the other institutions be used for certain capacity-building activities. Sets spending priorities for Hispanic-serving institutions and Historically Black Colleges and Universities that include education in disciplines in which minorities and low-income students are underrepresented and, in the case of Hispanic-serving institutions, the development of model transfer and articulation agreements.
<b>Part B: College Access Challenge Grants</b> - (Sec. 411) Establishes a College Access Challenge Grant program providing matching grants to philanthropic organizations that are members of eligible consortia for financial aid, mentoring, and outreach services to increase the number of needy students from underserved populations who enter and complete college.
Makes $300 million available for the program from FY2008-FY2012.
<b>Part C: Upward Bound</b> - (Sec. 412) Directs the Secretary to rescind the absolute priority for Upward Bound program participant selection and evaluation, established by regulation.
Authorizes and appropriates $57 million for each of FY2008-FY2011 to restore funding to all Upward Bound projects that: (1) received funding in FY2006 but not in FY2007; and (2) have grant score above 70.
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== Status of the Legislation ==
Latest Major Action:
9/7/2007: Conference report agreed to in House. Status: On agreeing to the conference report Agreed to by the Yeas and Nays: 292 - 97 (Roll no. 864).
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== Points in Favor ==
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== Points Against ==
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