Title:	Reauthorization of the Higher Education Act
To:	COHEAO Members
From:	Harrison Wadsworth, Executive Director Andrew Stringer, Washington DC Staff

May 6, 2004

The House Education and the Workforce Committee has introduced legislation that reauthorizes federal student aid programs in the Higher Education Act (HEA). The bill, the College Access and Opportunity Act of 2004, H.R. 4283, contains several provisions that directly impact the Perkins Loan program. The following outlines the proposed changes:

• The Base Guarantee
  • Through FY2006 - 100% of previous base guarantee as defined in current HEA (FY1999)
  • FY2007 and 2008 - 80% of FY2006 base guarantee
  • FY2009 and 2010 - 60% of FY2006 base guarantee
  • FY2011 and 2012 - 40%
  • FY2012 and 2014 - 20%
  • FY2015 - 0%

The legislation includes a ratable reduction/increase clause as well.

• Books and Supplies
  The books and supplies allowance increases to $600.
• Annual Loan Limits
  Annual loan limits increase to $5,500 for undergraduates and to $8,000 for graduate students.
• Aggregate Loan Limits
  Aggregate loan limits increase to $60,000 for graduate students, to $27,500 for undergraduate students two years into their program and to $11,000 for all other students.
• Forbearance
  The "upon written request" clause is struck with regard to communications between the Secretary of Education and individual schools.
• Special Repayment Rule Authority
  Compromise repayments of defaulted loans must be agreed to by the Secretary of Education. The bill removes additional qualifications found in current law.
• Rehabilitation
  Changed from 12 to 9 consecutive on-time monthly payments for a loan to be considered rehabilitated.
• Loan Cancellation
  Legislation alters eligibility for loan cancellation to include military service personnel and makes several technical changes.

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