Washington Update: Financial Aid; Terrorism Insurance; GAO Reports

Senators have introduced major financial aid legislation in the new Congress: one bill would simplify the FAFSA form and the other would reform student loan repayment programs.

Both the House and Senate also voted to reauthorize the Terrorism Risk Insurance Act that expired at the end of last year. Additionally, the GAO released two reports on higher education and a coalition of universities and science societies are hosting the second year of “Making Our CASE,” a student science advocacy program.

Two Higher Education Bills Related to Financial Aid Introduced Last Week

The Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN), along with a bipartisan group of Senators, introduced the Financial Aid Simplification and Transparency Act (FAST Act, S.108), legislation aimed at simplifying several aspects of the financial aid system. This legislation would replace the current Free Application for Financial Student Aid (FAFSA) form with a two question single postcard questionnaire called the “Student Aid Short Form.” Also, the FAST Act would enable the year-round use of Pell Grants for certain students, limit the amount a student is able to borrow based on enrollment, and simplify the process for repaying student loans. It would also result in the elimination of the Federal Supplemental Educational Opportunity Grant (SEOG) program, subsidized Stafford loans, and the Federal Perkins Loan program. More details on the legislation can be found on the Senate HELP Committee’s website.

Senator Angus King (I-ME) and several other senators introduced the Repay Act of 2015 (S.85). This legislation was originally introduced in the 113th Congress by Senator King and Senator Richard Burr (R-NC). This legislation would reform the current federal student loan repayment programs by combining them into two plans: a fixed repayment plan, based on a 10-year time span, and a single income-driven repayment option. Further information can be found on Senator King’s website.

The FAST Act and Repay Act are expected to serve as the starting point for the legislation reauthorizing the Higher Education Act in the Senate later this year.

House and Senate Approve Reauthorization of Terrorism Risk Insurance Act; President Obama Signs Legislation

Earlier this year, the House of Representatives and Senate approved the Terrorism Risk Insurance Program Reauthorization Act of 2015, which reauthorizes the Terrorism Risk Insurance Program through the end of 2020. The Terrorism Risk Insurance Program provides compensation for certain losses resulting from an act of terror. President Obama signed the legislation into law this week.

In the 113th Congress, the House of Representatives passed the Terrorism Risk Insurance Program Reauthorization of 2014. In December 2014, APLU joined a group of higher education associations in sending a letter to all Senators urging them to approve the House-passed legislation. A copy of the letter can be found here. Because the Senate did not pass this legislation last congress, the insurance program expired on December 31, 2014.

Government Accountability Office Releases Two Reports Related to Higher Education

Late last year, the Government Accountability Office (GAO) released a report titled Higher Education: State Funding Trends and Policies on Affordability. This report was initiated to study how state policies affect affordability of higher education look at ways states can act to make college more affordable. A podcast is available here.

Also, the GAO released a report titled Higher Education: Education Should Strengthen Oversight of Schools and Accreditors. This report looks at accreditor sanctions for schools not in compliance, the likelihood accreditors will sanction schools with weaker student outcomes, and how the Department of Education uses accreditor sanction information for oversight. The report recommends that the Department of Education look at ways “to better assess whether accreditor standards effectively address academic quality.” The Department of Education plans to address the recommendations.