Congress Passes HEA Reauthorization….Finally!



(July 2008). On July 31, 2008 the House of Representatives and the Senate passed, HR 4137, the Higher Education Opportunity Act of 2008 which is the conference report for reauthorization of the Higher Education Act by a vote of 380-49 in the House and 83 – 8 (and 1 voting present) in the Senate. This legislation is a landmark for the Perkins Loan Program, since it demonstrates very strong support for the program in a number of ways.

Specifically for the Perkins Loan Program the bill does the following:
  • The maximum Federal Capital Contribution authorized is increased from $250 million to $300 million per year. (This is subject to the funds actually being appropriated, which has been the problem in recent years.)
  • The Perkins Loan Program is reauthorized through 2015
  • The allowance for books and supplies is raised from $450 to $600.
  • The Department is required to return Perkins funds collected from voluntarily assigned loans to the institution that assigned them every six months, less collection costs of up to 30 percent.
  • The Department is only permitted to require the assignment of defaulted Perkins Loans in cases where schools failed to knowingly maintain collection records or decide to not to service the loans.
  • Annual loan limits are increased to $5,500 for undergraduates and $8,000 for graduates, with commensurate increases in aggregate levels.
  • Disabled veterans can more easily have their loans discharged.
  • The requirement that requests for forbearance be in writing is removed.
  • The number of on-time payments needed for loan rehabilitation is changed from 12 to 9.
  • The occupations for which Perkins Loans may be cancelled are expanded to include: full-time staff member in a pre-kindergarten or child care program that is licensed or regulated by the state; full-time faculty member at a tribally controlled university; librarian with a master’s degree in library science who is employed in a school served under Title I of the ESEA, or a public library serving a Title I school; full-time speech language pathologists with a master’s degree working exclusively in Title I schools; and for full-time firefighters. Also for service as a member of the armed forces in an area of hostility, at the rate of 15% for the 1st and 2nd years of service; 20% for the 3rd and 4th years of service; and 30% for the 5th year of service.
  • Disclosure requirements are greatly expanded when a Perkins Loan is being consolidated to inform the borrower about loss of benefits, etc.
  • The defense of infancy is repealed for Perkins Loans. (Sec. 486).
  • The Department of Education is prohibited from establishing a national unit record database.
  • Up to 25% of funds appropriated in a year for Work Study to a campus can be transferred to Perkins Loans, at the discretion of each campus. (Sec. 494A).
There are many other provisions of the bill that apply to all three loan programs, FFELP, Ford Direct Loans and Perkins. COHEAO will undertake the major task of reviewing and reporting on these provisions over the coming weeks.

To view the entire conference report visit: http://help.senate.gov/Hearings/2008_07_29_E/KOS08400_xml.pdf

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