AAU Recommendations on HEA Reauthorization to the House Education and the Workforce Committee January 31, 2003 The Honorable John Boehner Chairman Committee on Education and the Workforce U.S. House of Representatives Washington, DC 20515 Dear Chairman Boehner: On behalf of the Association of American Universities (AAU), an organization of 62 leading public and private research universities, I am pleased to respond to your request for recommendations for the reauthorization of the Higher Education Act of 1965 (HEA). In general, we believe that the HEA serves students, universities, and our nation well and that it does not need significant modifications. However, there are several areas that we believe merit Congress's attention and action to make improvements. AAU endorses the higher education community's reauthorization recommendations submitted by the American Council on Education on behalf of 44 higher education associations and organizations. We especially support the recommendations that aim to: increase access to higher education for low-income students by strengthening support for grants and early intervention programs, particularly the Pell grant program; improve terms and conditions of student loans; and reduce the regulatory burden on universities. AAU also strongly urges Congress to preserve the current decentralized system of higher education accreditation. This system has successfully facilitated self-review and peer-review to ensure and improve academic quality and public accountability of universities for over a half century. We endorse the statement included in the higher education community recommendations on ensuring accountability of institutions through high-quality information for students. We have also prepared our own set of recommendations that reflect the interests and priorities of the research universities that comprise AAU's membership. The attached document contains AAU's recommendations for each of the previously mentioned areas. In addition, we are particularly interested in improving two aspects of the HEA that uniquely affect AAU member universities and their students: 1) increasing financial support for graduate education through the Graduate Assistance in Areas of National Need (GAANN), Jacob K. Javits, and Foreign Language and Areas Studies (FLAS) programs; and 2) improving student loan terms and conditions for graduate students. We appreciate the opportunity to submit these recommendations and we look forward to working with you and your staff throughout the reauthorization process. Cordially, Nils Hasselmo President Identical letters sent to: Rep. Howard P. McKeon, Chairman, House Subcommittee on Century Competitiveness Rep. George Miller, Ranking Member, House Education and the Workforce Committee cc: Hunter R. Rawlings, III, President, Cornell University, AAU Chairman John T. Casteen, President, University of Virginia, AAU Vice-Chairman Robert M. Berdahl, Chancellor, University of California at Berkeley, AAU Past Chairman Enclosure NH/MMO/lc Association of American Universities Higher Education Act Recommendations January 31, 2003 Committee on Education and the Workforce Higher Education Proposals   Statutory Authority Suggested Amendment Rationale Proposed Statutory Language Grant Support 1* Title IV, Part A, Sec. 401 - Pell Grants Double the Pell grant maximum award - We strongly urge Congress to double the authorized and the appropriated maximum Pell grant over the course of six years beginning with the passage of HEA reauthorization legislation. The Pell grant is the foundation for providing access to higher education. Despite funding increases in recent years the real value of the maximum Pell grant is significantly below the level of purchasing power that it reached in the early 1980's when inflation is considered. --- 2* Title IV, Part A, Sec. 401 - Pell Grants Protect the Pell grant maximum award - We urge Congress to clarify in the HEA that the maximum Pell grant specified in the annual appropriations bill is the maximum grant that is to be awarded to students. The Pell grant program's periodic shortfalls have created the misimpression among students and families that grant awards must be reduced when shortfalls occur. The reauthorized HEA should clearly state that the maximum Pell grant specified in the annual appropriation bill is the maximum grant that is to be awarded to students. This predictability is an important element of an effective student aid system. --- 3* Title IV, Part A, Sec. 401 - Pell Grants Permit year-round Pell awards - We urge Congress to clarify the HEA to mandate that Pell grant eligible students who enroll in classes year round can receive Pell grant funds for any and all academic terms in the academic year. The additional grant funds that could be awarded should be proportional to the annual maximum Pell grant. For the most recent year, the maximum Pell grant award was $4,000 for the academic year. If this recommendation were in effect, then a full-time student attending a university with a semester system could receive a maximum award of $6,000 ($2,000 for each academic term - fall, spring, and summer). Students increasingly want flexibility in their educational programs. While the Department of Education has the authority to implement a "year-round" Pell grant, it has not done so. Current Pell grant regulations assume that all students will enroll for just two semesters (or three quarters) per year. However, many students would like to complete their degree in less time than the normal four year program. Year-round enrollment reduces the amount of time and money that a student spends in school and it makes better use of campus facilities. --- 4* Title IV, Sec. 402 - TRIO and Sec. 404 GEAR UP Maintain TRIO and GEAR UP - We urge Congress to maintain and strengthen the TRIO and GEAR UP programs. Both work well and neither requires significant modification. We recommend only minor changes - including increasing the minimum grant levels to account for inflation and increasing the authorization levels for all programs. We also recommend Congress add a graduate fellowship component to the TRIO Ronald E. McNair Post-baccalaureate Achievement program. Enhanced access to higher education depends on the availability of high quality intervention and support services efforts provided by the TRIO and GEAR UP programs. Students who receive high quality early intervention services are much more likely to enter higher education and to persist than those who do not have the chance to participate. Increasing the minimum grant and authorization levels is important to the efficacy of these programs. The McNair program helps to prepare students for doctoral study, but it provides no financial aid for these students at the graduate level. McNair students often cite the lack of financial resources as a reason for not pursuing graduate education. Adding a graduate fellowship component to McNair will help students overcome this obstacle. --- Student Loans 5* Title IV, Loan Limits - Graduate and Professional Students Increase student loan limits for graduate and professional students - We urge Congress to raise the cumulative loan limits for graduate and professional students to reflect increases in the cost of living since loan limits were last increased in 1992. ** We also recommend that the annual loan limit for graduate and professional students be eliminated and that Congress create a line of credit feature with appropriate safeguards. Loan limits for graduate and professional students have not been adjusted since 1992 and recent evidence suggests that students are borrowing increasing amounts of money from private sector loans. Federal student loans offer the best lending terms and conditions of any other source of loans, including low interest rates, the in-school interest exemption, repayment options, and payment deferments. Graduate and professional students are independent students, who in some cases have children. These students desire and require greater lending flexibility to finance their education and to complete their degrees on time. --- 6* Title IV, Subsidized Loans - Graduate and Professional Students Allow graduate students to carry forward unused undergraduate subsidized loan eligibility - We urge Congress to allow graduate and professional school students who did not reach the cumulative undergraduate borrowing limit to carry forward the unused amount in loan eligibility and apply it to post-baccalaureate expenses. The subsidized loan program better benefits students because they graduate with less debt. Carrying forward undergraduate loan eligibility to graduate studies will provide a more affordable and flexible way for graduate and professional school students to finance their education. --- 7* Title IV, Sec. 464 - Perkins Loan Limits - Undergraduate and Graduate Students Increase Perkins loan limits - We urge Congress to increase Perkins Loan program loan limits to reflect changes in the cost of living since loan limits were last changed. Specifically, we recommend that loan limits be increased to a maximum of $5,500 for undergraduates, and $10,000 for graduate/professional students. We also recommend that the Perkins cumulative loan limits should be increased to $27,500 for undergraduates and to $67,500 for graduate and professional students.*** The Perkins Loan program provides valuable loan assistance to the neediest students. Perkins loan limits have not been adjusted since 1992, and recent evidence suggests that students are borrowing increasing amounts of money from private sector loans. --- 8* Title IV, Subsidized Loans - Undergraduate Students Increase undergraduate subsidized loan limits - We urge Congress to increase undergraduate subsidized borrowing limits to reflect the changes in the cost of living since loan limits were last increased in 1992.** Specifically, we recommend that the cumulative loan limit for dependent students be increased to $30,000.*** We also recommend that the first year loan limit be increased to at least $4,000. The remainder of the funds ($26,000) would be available to students in the form of a line of credit with appropriate safeguards to ensure that students do not use their full loan eligibility before graduation. Loan limits have not been adjusted since 1992, and recent evidence suggests that students are borrowing increasing amounts of money from private sector loans. Subsidized Federal student loans offer the best lending terms and conditions of any other source of loans, including low interest rates, the in-school interest exemption, repayment options, and payment deferments. Students desire and oftentimes require greater lending flexibility to finance their education and to complete their degrees on time. --- 9* Title IV, Unsubsidized Loans - Undergraduate Students Raise undergraduate unsubsidized loan limits - We urge Congress to increase undergraduate unsubsidized borrowing limits to reflect the changes in the cost of living since loan limits were last changed in 1992. Specifically, we recommend increasing unsubsidized loan limits for all eligible students in the first and second year to $5,500 and to $7,000 for students in subsequent years. Loan limits have not been adjusted since 1992, and recent anecdotal evidence suggests that students are borrowing increasing amounts of money from private sector loans. Unsubsidized Federal student loans offer better lending terms and conditions than private loan sources, including low interest rates, repayment options, and payment deferments. --- Campus-based Student Aid 10* Title IV Designate "Campus-Based" Programs as Institutional Partnerships and increase component program funding authorization levels - We urge Congress to designate the "campus-based" aid programs as the "Institutional Partnership" programs and to increase the authorization levels of the component programs in FY2005 as follows: Supplemental Educational Opportunity Grants (SEOG) $1 billion; Federal Work Study $1.5 billion; and Perkins Loan Capital Contributions $300 million. SEOG, Federal Work Study, and Perkins Loans are critical pieces of many students' financial aid package, and institutions are an important piece of making those packages work. Re-designating these programs as "Institutional Partnership" programs will reinforce the cooperative efforts that the federal government and universities make to ensure that students have the financing they need to pay for college. We believe the new label more aptly describes the partnership function of the programs institutions must provide at least 25 percent of all funds received, thereby increasing the impact of the federal dollars. SEOG should be better funded to realize its original intent of providing additional grant funding to the neediest students. The Federal Work Study program has nearly reached its goal of serving one million students with over $1 billion in federal investment. This program places students in jobs on campus, in the campus community, and in the private sector to help them pay for college. The Perkins Loan program continues to provide an extremely low interest rate for student loans. Forgiveness options for work in law enforcement, teaching and nursing have made this program more and more popular. These programs work well in their current form, but to further enhance their efficacy we recommend that the authorized funding levels for FY 2005 be increased. Increased funding in these program combined with an increase to the Pell grant maximum award would improve access for financial needy students. --- Graduate Education 11* Title VII, Sec. 716 - GAANN Strengthen GAANN - We strongly urge Congress to authorize increased funding for the Graduate Assistance in Areas of National Need (GAANN) program. Specifically, we recommend that sufficient funding be authorized to support at least an annual total of 1,200 GAANN fellowships, including 400 new awards. Establishing this minimum level of investment would reinvigorate GAANN at a time when our nation must have the intellectual capability to respond to increased security threats and stop further erosion to our leadership position in the world economy. Given economic and fiscal constraints, we believe this recommendation represents a prudent investment. --- 12* Title VII, Sec. 705 - Javits Enhance Javits - We strongly urge Congress to authorize increased funding for Jacob K. Javits Fellowships. Specifically, we recommend that sufficient funding be authorized to support at least an annual total 400 Javits fellowships, including 100 new awards. Javits is the only federal graduate education program that supports the arts and humanities. Establishing this minimum level of investment would reinvigorate the program. Given economic and fiscal constraints, we believe this recommendation represents a prudent investment. --- 13* Title VII, Sec. 703 Javits and Sec. 714 - GAANN Eliminate Title IV Needs Analysis for Javits and GAANN - We urge Congress to eliminate the reference to Title IV, part F as a requirement for Javits and GAANN awards and to restore the provision used prior to the 1998 reauthorization that required institutions to determine whether students have financial need. As full time, independent graduate students, nearly all Javits and GAANN fellowship recipients demonstrate financial need. As a result the formal FASFA process is a bureaucratic tangle that creates extra paperwork and unnecessary delays in processing applications. Moreover, needs analysis reduces the value of the award to married fellowship recipients with employed spouses as compared to unmarried recipients. This resulting reduction in award amounts has significantly reduced the status and usefulness of these federal fellowships when compared with other fellowships that make awards based on merit only. No other federal graduate fellowship program contains a needs analysis requirement, including the HEA Title VI Foreign Language and Area Studies (FLAS) program. For these reasons, GAANN and Javits fellowships are not as desirable as other federal and non-federal fellowships from a student perspective. This recommendation was included in the higher education community's FED UP recommendations that were submitted to the Committee in the 107th Congress. --- 14* Title VII, Sec. 703 Javits and Sec. 714 - GAANN Clarify Javits and GAANN stipend link to NSF fellowships - We urge Congress to clarify the HEA statutory link between the stipend levels for Javits and GAANN fellowships to the stipend level for the National Science Foundation Graduate Research Fellowship (GRF) program. Currently the HEA states that the stipend levels for Javits and GAANN shall be "set at a level of support equal to that provided by the National Science Foundation graduate fellowships." Javits and GAANN stipend levels have historically been linked to the GRF stipend level. The HEA should be amended to reflect this historical link in order to avoid potential confusion of Congressional intent due to the other fellowship programs NSF also supports. --- 15* Title VII Authorize a new minority fellowship program - We urge Congress to authorize a new graduate education fellowship program for minorities seeking to join the higher education professoriate. The underrepresentation of minorities with doctorates is particularly problematic in the higher education professoriate - where minority students entering degree programs find themselves in academic environments with few persons of color to serve as instructors, role models, mentors and advisors. The small number of minorities entering the higher education professoriate is further complicated by the increasing debt levels incurred by students while they earn initial and advanced degrees - a factor which is exacerbated by the modest entry level salaries paid to new faculty members. To address this need, we propose a new minority fellowship program - the Patsy T. Mink Fellowship Program for students who plan to enter the higher education professoriate. --- International Education 16* Title VI, Sections 601-631 - International Education Strengthen international education investments - We strongly urge Congress to authorize increased funding for HEA Title VI International Education programs. Specifically, we recommend increasing the authorization levels in Title VI as follows: For FY2005, $120 million for Part A; $20 million for Part B-Sec 612, $10 million for Part B-Sec 613, and $10 million for Part C. . In all cases, we recommend the out-year authorizations of "such sums as necessary should also be authorized to carry out this subpart." The growing importance of international education to the nation's security and global leadership necessitates stronger investment in these programs. Strengthening the Foreign Language and Area Studies Fellowships (FLAS) program is especially important because of the advanced training opportunities the fellowships provide to talented students. --- Regulatory Burden 17* Title IV - Student loan disbursements Permanently restore expired provisions that streamline student loan disbursements - We strongly urge Congress to renew permanently two expired provisions relating to the disbursement of student loans by institutions with student loan cohort default rates below 10%. The expiration of these provisions has placed an unnecessary administrative burden on institutions of higher education that also disadvantages students. The first provision allows schools to disburse a loan in a single installment for any period of enrollment that is not more than one semester, quarter, trimester or four months. The second provision waives the requirement that first-year, first time borrowers loan proceeds be withheld for 30 days and thereby allow these students to have access to funds for school supplies and other associated costs during the first weeks of the school year. --- * Recommendation is included in the ACE-higher education community set of recommendations and AAU strongly urges its adoption. ** Loan limits for first year students were last increased in 1986. The HEA Amendments of 1992 increased loan limits for all other borrowers. *** These amounts are based on an expected 35% increase in the Consumer Price Index between July 1, 1993 and July 1, 2005.