Final stretch: as Congress nears the end of its session, some work is finished but much remains to be done

University Business, Oct, 2007 by Alan Dessoff

SOME LEGISLATION IMPORTANT to higher education has been completed, but much remains to be done as Congress enters the home stretch of its work for the year. Among issues still pending is the long-delayed reauthorization of the Higher Education Act, which finally seems to be moving toward completion as House and Senate conferees work out differences between versions of the legislation both chambers have passed.

One measure that gained final congressional approval, and which President George W. Bush was expected to sign, would increase federal support for science education and research in an effort to address challenges facing American competitiveness in the global economy.

Although the America COMPETES Act focuses on strengthening educational opportunities in science, technology, engineering, and mathematics principally at the K-12 level, it contains a number of provisions of interest to higher education if Congress funds them as called for in the legislation. As analyzed by the American Council on Education (ACE), the major coordinating organization for the nation's higher ed institutions, they include:

* $22 billion to the National Science Foundation over FY 2008-2010, including grants for graduate research fellowships.

* $17 billion to Department of Energy programs to foster collaboration between universities and the agency and for an early career grant program for scientists at universities and national laboratories.

* Creation of programs at the Department of Education to align K-12 math and science curricula with the requirements of college courses. Also, authorization of $151.2 million over FY 2008-2010 to help students earn bachelor's degrees in a science or math field or critical foreign language concurrently with a teacher certification, and $125 million to help working teachers enroll in part-time graduate programs.

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* $2.65 billion to the National Institute of Standards and Technology to create a new Technology Innovation Program that would encourage the participation of universities in high-risk, high-reward, pre-competitive technology development by small- and medium-sized companies.

STUDENT LOANS

Student loan issues, which captured frontpage headlines earlier in the year, continue to be high on both legislative and regulatory agendas. On the legislative side, the full Senate will consider a measure to expand the federal government's oversight of private student loans by requiring more disclosure to prospective borrowers about the terms of their loans.

Proposed by Sen. Christopher Dodd (D-Conn.) and approved by the Senate Banking, Housing, and Urban Affairs Committee, which Dodd heads, the Private Student Loan Transparency and Improvement Act also would require lenders to notify borrowers of their eligibility for lower-cost federally guaranteed loans.

In an analysis of data from DOE's National Postsecondary Student Aid Study, ACE reported that one of five undergraduate private loan borrowers did not take advantage of federal student loans that offer lower interest rates and more flexible payment options, even though the students appeared to be eligible for the aid.

Dodd's bill also bars lenders from "co-branding" their loans with an institution's logos or colors and mandates a government study of the extent to which underwriting practices may disparately impact student borrowers and colleges on the basis of factors such as race and income level.

On the regulatory front, the Department of Education responded to a critical report of its oversight of the federal student loan programs by maintaining that it is taking steps to address many of the shortcomings cited in the report released in August by the Government Accountability Office (GAO).

According to the GAO, the government's nonpartisan watchdog agency, DOE has failed to safeguard the loan programs and should immediately increase its oversight of lenders and schools and fully enforce applicable laws.

Under current law, lenders participating in the federal program are prohibited from using inducements or gifts to curry favor with IHEs. The GAO found that the Education Department doesn't have a sufficient oversight program in place to identify and address questionable lender behavior and has not updated its inducement guidelines in 20 years.

The GAO also determined that the department had a poor system for dealing with complaints of improper lender behavior. Only two of 26 complaints that DOE received from 2001 to 2006 prompted action by the department, according to the watchdog agency. Further, it said, DOE attempted to use its sanctioning authority against lenders accused of improper inducements only twice over the past 20 years.

The GAO prepared the report at the request of congressional members including Rep. George Miller (D-Calif.) and Sen. Edward M. Kennedy (D-Mass.), chairs of the House and Senate education committees. "This report again underscores that the Department of Education completely defaulted on its responsibilities to protect the nation's student loan programs," Miller declared in a statement. Added Kennedy, "Students and families should be deeply concerned that the Department of Education failed to enforce the laws designed to protect them from unscrupulous lenders for so long."