The College Opportunity and Affordability Act of 2007 (HR 4137) was introduced in the US House of Representatives on Friday, November 9, 2007. This is the House bill to reauthorize the Higher Education Act. A summary of the bill can be found at http://edlabor.house.gov/publications/20071109COAASummary.pdf The full text of the bill (all 747 pages) can be found at http://edlabor.house.gov/bills/HEAReauthorizationText.pdf The markup is expected to occur this week. The following summarizes key sections of the legislation. Due to limited time, less important sections have been omitted from this summary. The summaries have been labeled with the relevant section to make it easier to identify which sections were skipped in this summary. Mark Kantrowitz Publisher, FinAid.org SUMMARY Sec. 107 requires the US Department of Education to link to the federal student aid web site from the front door of the US Department of Education web site, and permits the department to advertise and promote the federal student financial aid web site. Requires the Department to improve the site search tool to make it easy for families to find the federal student aid programs for which they are eligible, including student aid programs of other federal agencies. Sec. 108 requires States to maintain state support of public colleges at more than the five-year moving average (with provision for waivers by the US Department of Education for exceptional circumstances), or the Department will withhold LEAP funding from the state. Authorizes the Department to conduct research into methods of cost containment and to publicly recognize colleges that are doing an effective job of cost containment. Sec. 109 revisits the flawed College Affordability Index proposal, with slight differences. Rather than compare an individual college's tuition inflation to the Consumer Price Index, it requires BLS to develop an annual Higher Education Price Index (HEPI) that reflects college tuition inflation disaggregated by level and control of the institution. Requires the Department to produce an online tool that ranks colleges by the dollar and percentage change in tuition and fees over a three-year period. In addition, any college that has an increase that outpaces its corresponding HEPI will be put on a "Watch List". Such colleges will be required to establish a quality-efficiency task force to review the institution's operations and to report the reasons for the greater-than-average increase in the college's tuition rates. There will be exceptions for institutions whose cost is in the lowest quartile within each class or where the dollar increase is less than $500. Sec. 801 would provide grants to colleges that have tuition inflation less than or equal to the HEPI. The grants will be used for need-based grants to Pell-eligible students. Establishes bonus grants for colleges that guarantee that tuition increases will not exceed the HEPI. Also requires the Department to create a set of model "net price" calculators, where net price is defined as the difference between tuition and fees and grants/discounts from the institution and government. Starting 3 years after passage of the reauthorization act, colleges will be required to provide families with a net price calculator. Will require admissions applications to provide information about the average net price for each income quartile. Requires the Department to create a standard format web page for colleges to optionally use to disclose a variety of Common Data Set items (some not currently in the Common Data set). Mandates that the Department conduct the National Postsecondary Student Aid Study (NPSAS) at least every four years. Currently the NPSAS is conducted every three years. Sec. 110 requires colleges to disclose the ISBN of college textbooks in course schedules. Sec. 111 institutes a variety of requirements concerning lender-college relationships, including (among other provisions): - Prohibits lenders on a school's preferred lender list for private education loans from originating private education loans to a student or parent until the college has discussed with the student/parent their remaining federal education loan eligibility - Bans lenders on a college's preferred lender list for private education loans from using the college's name or logo in any way that implies the college endorses the loans - Requires colleges to establish a code of conduct that bans conflicts of interest with regard to education loans. Bans gifts from lenders, guarantors and servicers to financial aid administrators and other college employees with responsibilities relating to education loans. Also bans consulting arrangements. Also bans revenue sharing arrangements where the school recommends a lender or loan products of the lender. Bans call center staffing and financial aid office staffing by lenders. Bans opportunity loans in exchange for benefits to the lender concerning federal loans. Bans lender advisory board service by financial aid administrators, even if unpaid. Requires college employees and officers to undergo annual compliance training. The proposals are generally weaker than the Senate legislation, the New York SLATE legislation, and the recently published final regulations from the US Department of Education. Sec. 112 requires a feasibility study concerning the establishment of a National Electronic Student Loan Marketplace for federal and private education loans. The marketplace would require lenders to adhere to the advertised rates and would provide a mechanism for borrower and financial aid administrator feedback and ratings concerning the quality of the lender's loan products and loan servicing, as well as other measures of customer satisfaction. The marketplace would match prospective borrowers with lenders. Such a marketplace would be similar to the marketplaces offered by Simple Tuition, eStudentloan, College Loan Market, Student Loan Scout and TuitionBid. Sec. 401 authorizes a maximum Pell Grant of $9,000, allows year-round Pell Grants (effective 7/1/09), modifies the AC/SMART Grant to be prorated for less than full-time enrollment. Sec. 405 increases the SEOG allowance for books and supplies from $450 to $600. Sec. 441 does the same for FWS. Sec. 462 does the same for Perkins. Sec. 423 requires lenders, guarantee agencies, secondary markets to provide any federal student loan information requested by an institution of higher education concerning its alumni or by third party servicers working on behalf of the college to prevent student loan defaults by the college's alumni. Sec. 424 requires disclosure by consolidation lenders that including a Perkins Loan causes the loss of certain benefits (subsidizied interest, loan cancellation). Sec. 425 reauthorizes loan forgiveness for service in areas of national need. Areas of national need include -- with some limitations concerning the location of the full-time employment -- early childhood educators, nurses, foreign language specialists, librarians, highly qualified teachers, child welfare workers, speech-language pathologists, national service, school counselors, public sector employees (police, fire, law enforcement, public safety, emergency management, public health, public interest legal services), nutritional professionals, medical specialists, and mental health professionals. Forgives $2,000 per year for up to five years of full-time employment. Sec. 427 expands the definition of totally and permanently disabled to include similar determinations by the VA. Sec. 452 modifies the definition of public service job for public service loan forgiveness to exclude members of Congress. Clarifies that public health includes nurses and other health care practitioners and not just doctors. Clarifies that early childhood education includes licensed/regulated childcare, Head Start, and State-funded preK. Sec. 464 would increase Perkins Loan annual limits from $4,000 to $5,500 for undergraduate students and $6,000 to $8,000 for graduate students and aggregate limits from $40,000 to $60,000 for graduate students, from $20,000 to $27,500 for undergraduate students who have completed two years toward a bachelor's degree, and from $8,000 to $11,000 for other students. Also eliminates the requirement for a written request for forbearance, allowing instead the institution to confirm the agreement in writing to the borrower. Allows for loan rehabilitation after 9 months of on-time payments instead of 12. Sec. 465 modifies Perkins loan cancellation to add service as a full-time fire fighter, full-time faculty member of a Tribal College or University, as a librarian in national need areas, as a full-time speech language therapist. Sec. 471 modifies the definition of cost of attendance for students living in military housing or receiving a basic housing allowance to exclude the cost of room (but not board) from the allowance for room and board, effective 7/1/09. Sec. 472 modifies the definition of total income to explicitly permit the current practice of using estimated calendar year income (taxed and untaxed) and estimated taxes for dislocated workers. Also modifies the definition of untaxed income and benefits to exclude the value of military housing or basic housing allowance. Modifies the definition of veterans education benefits in the first year to exclude the amount by which basic pay was reduced that year to make the veteran eligible for the veterans' education benefits. Effective 7/1/09. Sec. 481 adds a compliance calendar to the master calendar provisions. This is intended to cover any required reports or disclosures. Sec. 482 mandates FAFSA4CASTER. It also requires the development of a two-page EZ FAFSA form for students who qualify for simplified needs and auto-zero-EFC. Requires a real-time data match with SSA. Establishes a goal of reducing the number of data elements on the FAFSA by 50%. Requires paid preparers of the FAFSA to disclose that the FAFSA is a free form that can be completed without professional assistance and to provide the fafsa.ed.gov web address. Requires the Department to enable students to submit the FAFSA prior to October 15 of the year prior to the student's planned year of enrollment. Requires the Department to report on the adequacy of financial aid award letters and to prepare a model format for such financial aid award letters. The model format will include, at minimum, COA (including tuition and fees, room and board, books and supplies, and transportation), the amount of financial aid that does not need to be repaid (grants and scholarships), the conditions for renewability of the award, the amount of work-study, the types and amounts of federal education loans (and the interest rates, loan term, monthly payment and total repayment amount of such loans), the amount of PLUS loan for which the parents are eligible, the net cost (difference between COA and financial aid offered by the college), sources of additional information concerning the financial aid offer, and other information required by the Department for making informed borrowing decisions. Sec. 484 is a sense of the Congress statement that the Department work with the IRS to draw income information for the FAFSA directly from the IRS in order to simplify the FAFSA. Sec. 486 closes a loophole regarding the defense of infancy and Perkins loans. Sec. 488 establishes a program to encourage articulation agreements, including a variety of strategies such as common course numbering and general education core curricula. Sec. 489 establishes a variety of requirements concerning preferred lender lists including - disclosure of why the institution chose each lender on the list, including disclosure of the method and criteria used to select lenders on the list - disclosure that students (and their parents) are not required to borrow from a lender on the preferred lender list - requirement of a minimum of 3 unaffiliated lenders on a federal education loan preferred lender list and a minimum of 2 unaffiliated lenders on a private education loan preferred lender list - required disclosure of the affiliate relationships between lenders included on the preferred lender list - requirement that preferred lender lists be compiled for the sole benefit of the students attending the college (or their parents) - ban unnecessary delays in loan certification for lenders that are not recommended, promoted or endorsed by the college - gives the Department broad regulatory authority concerning preferred lender lists - requires the Department to maintain a list of lender affiliations and provide this information to colleges. Affiliation is defined in terms of ownership and control, and not forward-purchase agreements. Sec. 491 requires ACSFA to provide information concerning early awareness programs and public-private partnerships that increase awareness and total amount of need-based student aid for low and moderate income students. Also requires ACSFA to monitor the adequacy of total need-based aid for low and moderate income students from all sources and assess the implications for access and persistence. Sec. 499 requires an evaluation of the loan auction pilot program. Sec. 704 establishes the Patsy T. Mink Fellowship Program to provide graduate fellowships (masters and doctoral degrees) to highly qualified minorities and women in academic areas where such individuals are underrepresented among college faculty. Award amounts would be similar to the NSF Graduate Fellowships. Also establishes a scholarship program of up to $5,000 per year for family members of veterans and members of the military. Sec. 951 establishes a loan repayment program for prosecutors and public defenders who commit to at least 3 years of service. The amount of repayment per borrower will be subject to a $10,000 annual limit and a $60,000 aggregate limit. Sec. 1002 establishes requirements for private education loans (any private education loan issued expressly for postsecondary education expenses (COA), including both school-certified and non-school-certified loans, but excluding home equity loans or other loans secured by real property or a dwelling): - bans revenue sharing - bans gifts to colleges or their employees - bans co-branding of private education loans using college names and logos - bans financial aid administrators from serving on the advisory board of a private education lender or their affiliates - bans private education loans from charging a penalty fee for prepayment Sec. 1021 amends the Truth in Lending Act to apply to all private education loans and adds a variety of required disclosures. Establishes a 30-day lock on interest rates and fees and a 3-day borrower's remorse period. In addition, requires private education lenders to notify the college about a private education loan before disbursing funds. This effectively will cause such loans to be considered estimated financial assistance and cause amounts exceeding the EFC to be treated as a resource, reducing need-based aid eligibility. Sec. 1041 requires a study of the impact on borrowers of the consideration of nonindividual factors (e.g., cohort default rate, accreditation, graduation rate) in underwriting private education loans. The focus of the study is on whether such factors increase access or result in less favorable rates for borrowers based on the lack of credit history, gender, race, income level, and college. -------------------------------------------------- Mark Kantrowitz Publisher, FinAid Director of Advanced Projects, FastWeb Author, FastWeb College Gold FinAid Page LLC PO Box 2056 Cranberry Township, PA 16066-1056 Tel: 1-724-538-4500 Fax: 1-724-538-4502 Email: mkant@finaid.org, mkant@fastweb.com www.fastweb.com www.finaid.org www.collegegold.com