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 AACC's Position on the Reauthorization of the Higher Education Act 


I. Increase access to college for students and families with financial need.

The Higher Education Act of 1965 was designed not only to ensure access to a college education for all Americans, but also to use higher education and training as a means to achieve economic prosperity and other social benefits.  Federal investment in higher education and student aid has been remarkably productive, reaping substantial returns for both the individual and broader society.

Today, more than 8 million students and families rely on federal financial aid annually to help pay for a higher education.  The federal government provides 70% of all college assistance, and the face of American higher education would look radically different without this federal involvement.  

Over the next decade, college enrollment is expected to increase by 14%, of which 80% will be minorities, and of these minorities, one-fifth will live below the poverty line.  It is imperative that Congress continue to invest in providing aid to students and families with need, to ensure both access to college and economic prosperity. 

Pell Grant Program:  

A. Double the Pell Grant maximum award over the course of the next Higher Education Act (HEA) reauthorization.  Over the past 30 years, the Pell Gant program has expanded its reach, so that it now serves almost five million students, 70% of whom come from families with incomes of $20,000 a year or less. However, the buying power of the maximum Pell Grant award has eroded over the last few decades, and now covers only 42% of the cost of tuition at the typical four-year public institution, compared to 84% in 1976.  During the most recent year for which data are available, close to 1.3 million community college students received a grant; swelling enrollments will raise this number closer to 1.5 million in the 2002-2003 award year.

The federal government’s commitment to the equality of access to postsecondary education should be reaffirmed by doubling the maximum Pell Grant award.   While college access has increased across all economic strata, the gap between college attendance and persistence between the most, and least, affluent segments of our society has not closed.   AACC therefore believes that the authorizing committees should strongly endorse significantly higher Pell Grant funding, which is effectively targeted to those who with the most financial need.  

In addition, Congress should not cede to the Executive Branch the authority to set the Pell Grant maximum, based on the latter’s projection of the cost of the maximum grant.  Authority to set the maximum grant has historically been vested with the Appropriations Committees, who are immediately accountable to the public.

B. Eliminate the “tuition-sensitivity” component of award rules to allow all community college students to qualify for the maximum Pell Grant award, irrespective of tuition and fees paid.  The current Pell Grant award rules prevent students attending the lowest-cost community colleges from receiving the Pell Grant maximum.  AACC believes that the Pell Grants should be made available to all students on the same terms and conditions--that it should be a true voucher with full portability.  Students should not be financially disadvantaged because they choose to attend the lowest-priced institutions.

C. Eliminate the link between institutional loan default rates and Pell Grant eligibility.  In 1998, Congress extended the loss of loan eligibility for institutions with a cohort default rate of 25% or greater for three consecutive years to the Pell Grant program.  AACC believes that it is unfair to deny students Pell Grants because previous students have defaulted on their federal student loans.  In addition, the loss of loan eligibility for schools with persistently high default rates has successfully eliminated most of the poorly performing Title IV-participating institutions.

D. Support reinstatement of Pell Grants for prisoners under circumscribed conditions (non-lifetime sentence, covering tuition costs only).  Community colleges continue to believe that Congress should foster reduced recidivism and give deserving needy individuals a chance to redeem themselves by providing limited Title IV support for postsecondary tuition expenses.  Until 1992, the HEA did provide support to incarcerated individuals, and the evidence shows that this was a sound economic investment.  Large government and societal costs savings accrue when incarcerated individuals are given motivation to lead a law-abiding, productive lifestyle through postsecondary education.

Need Analysis: 

Revise the current Needs Analysis formula to ensure that the neediest students receive enough financial aid to help cover the costs of a college education, and increase the current “income protection allowance” of $5,300 for single independent students.  Single independent students are often the students who need financial aid the most.  However, their current treatment in needs analysis all too often leaves them ineligible for Pell Grants and other essential financial aid.  It is important that Congress allow a modest increase in the current income protection allowance for these students to ensure that they can afford a college education.

Campus-Based Programs (Supplemental Educational Opportunity Grants, Federal Work-Study, Federal Perkins Loans) Allocations: 

Ensure greater equity in the distribution of campus-based funds.  New approaches need to be taken to ensure that institutions with little or no access to campus-based funds can provide at least some of these funds to their students.  The principle of simply using student need for the allocation of a federal financial fund should be observed wherever possible.

II. Retain loan limits and practices that make borrowing federal education loans for community college students financially manageable.

Student loan growth has far outpaced the growth of need-based grant aid programs over the past decade. While student loans have clearly become an essential college financing vehicle for millions of students, increasing the current loan limits will negatively impact most community college students and institutions.

A. Retain current loan limits in the Federal Family Education Loan and Federal Direct Loan programs.  AACC does not support increased loan limits.  Community college students currently have adequate access to loan capital, and over-borrowing remains a risk for many students, especially first-time students who have yet to establish themselves academically.  In addition to the heightened risk that increased loan limits pose to community college students, the colleges themselves would face significant additional risk because of potentially higher cohort default rates.  Consequently, community colleges cannot at this time responsibly support increased maximums given the substantial threat that they present to AACC’s members and their students.

B. Grant institutions the authority to reduce individual loan eligibility for categories of students.  The current case-by-case requirement for reducing loan eligibility has proven to be unhelpfully restrictive.  In addition, this provision has been implemented in a differential fashion across the country.  Institutions should be given the prerogative to set lower maximums for entire categories of students, such as first-time, or academically-at-risk, etc.  Institutions have an inherent incentive to provide financing that is adequate to meet a student’s budget, concerns that colleges might act otherwise are not reasonable.

In addition, community colleges request that Congress review the method of calculating student loan default rates.  These rates should be changed to better reflect the low incidence of borrowing at most community colleges.

III. Promote new, more appropriate and accurate forms of accountability for community colleges within the Higher Education Act. 

Community colleges recognize the call for accountability in the federal student aid programs.  Any new accountability measures should be built on and reflect the extensive and detailed performance-related information that the vast majority of community colleges are already providing to students, state and other regulatory bodies, and accrediting agencies.  

The current accountability debate underemphasizes the highly competitive environment that affects all institutions of higher education, including community colleges.  The country’s dynamic postsecondary system is far more effective in promoting accountability, and its underlying goal of quality, than any regulatory apparatus could ever be.  Therefore, AACC believes that new federal accountability measures should focus on giving potential students greater information about their college options, since a robust academic marketplace is inherently accountable.  More specifically, the focus of any new accountability efforts should be on refining the Student Right-to-Know law, which provides a tested framework for providing institutional disclosures.  

AACC will oppose any “bright line” graduation or completion rate standard that an institution must meet in order to maintain Title IV eligibility or other funding.  This type of approach is fundamentally flawed, because it does not reflect the fact that many community college students are not interested in obtaining an associate’s degree; and it also overlooks the obvious and enormous diversity of America’s colleges and universities, who enroll more than 15 million students annually.

A.  Student Right-to-Know (SRK) law.  The current SRK framework does not accurately reflect the effectiveness of community college education and training programs.  In focusing on SRK, AACC thinks that the following should be considered:  tracking a broader universe than full-time, first-time students; counting as a “completion” attainment of a skills certificate or recognized skill; allowing short-term certificates to count for completion; and recognizing individual goal attainment.  In addition, any new data-reporting requirement must be meshed, wherever possible, with existing state, local, and accreditation requirements.   Also, Congress should recognize that a uniform system of reporting for the enormous range of American institutions of higher education may not be in best accommodate the interests of institutions or students.

B. Introduce mandatory information-sharing on transfer students for all Title IV-eligible institutions.  The SRK system is undermined by the fact that institutions whose former students subsequently re-enroll in another institution are not routinely informed.  In today’s technology-driven society, this shortcoming need not, and should not, exist, especially as colleges are being held more accountable for their performance.  The HEA should require that when an institution knowingly enrolls a student that has previously attended another college, the latter be notified within 30 days.  AACC would also support other means to enable higher education institutions to follow the educational paths of their students.

C.  Modify the Family Education Records and Privacy Act (FERPA) to allow institutions to share information necessary to document transfer between institutions.  Some colleges assert that FERPA prohibits them from reporting on transfers-in to their institutions.  FERPA should be modified to ensure that this potential obstruction to legitimate information sharing does not occur.  However, the identity of individuals needs to be protected.

IV. Alter the Return of Title IV Funds statute to alleviate financial burdens on students who withdraw from school. 

A. Reduce the amount of grant funds that must be returned by needy students who withdraw during a period of enrollment.  The 1998 HEA amendments often require the relatively few community college Pell Grant and other federal grant recipients who withdraw to return a portion of those funds to the federal government.  This places a substantial burden on these students, who often have already used the grant funds on tuition, books, equipment, and living expenses, that they are then asked to repay.   It is important to remember that most Pell Grant recipients are, by definition, extremely financially needy.

Therefore, AACC supports altering the current calculation in the statute to lessen the amount that students who withdraw during a term must return to the federal government.  It should be noted that only a very limited amount of federal grant funds are affected by these provisions, as few individuals leave college during a period of enrollment.

B. Reaffirm that institutions should determine the date of a student’s withdrawal.  Despite repeated requests from the higher education community, the Department of Education has refused to affirm the letter of the HEA where it states that institutions are responsible for determining the date of a student’s withdrawal.  Therefore, we support re-writing this provision in the reauthorization.

V. Provide greater flexibility within distance education to allow institutions the ability to serve non-traditional students and award certificates and degrees that provide students with important educational opportunities, job skills and training.

Advances in technology have made it possible for community colleges to offer innovative and flexible classes and coursework that help to expand access to many non-traditional students seeking a higher education and job skills.  As distance education continues to expand and increasing numbers of workers return to college to re-train, it is important that Congress revise certain distance education provisions to enable community colleges to deliver education in new modalities.

A.  Modify the “50% rule” in specific circumstances.  The “50% rule” that limits the amount of distance education and related courses that institutions may offer and retain institutional eligibility for Title IV programs has generally worked well.  However, a number of high quality colleges are now at or above the 50% threshold.  Consequently, AACC supports giving waiver authority to the Secretary of Education for colleges that have, or are about to, exceed this limit.  This is similar to the policy that has been used to positive effect in the Distance Education Demonstration Program.

B. Overhaul and update the distance education statute to reflect contemporary education practice and terminology.  The HEA statute in the area of distance education has not been substantially altered since 1992.  During that time, a new and entirely unanticipated world of educational delivery has burgeoned.  The HEA needs to be rewritten to reflect the “anytime, anywhere” nature of higher education today, and to be sufficiently flexible to accommodate unanticipated future needs.

VI. Establish a new teacher training program focused on the expanding community college role in this area. 

AACC advocates the establishment of a new teacher training program targeted to the large and growing role of community colleges in this area.  Although not commonly perceived as such, community colleges are deeply involved in many aspects of responding to the nation's demand for teachers.  Estimates vary about the number of current elementary and secondary school teachers who began their postsecondary educations at community colleges, but the number is usually regarded as at least 25%, perhaps as high as 50%.  In many cases, all of the subject area expertise that teachers receive is gained at a community college.

However, community colleges do much more than simply serve as a pipeline for individuals who ultimately receive baccalaureate degrees in education and enter the teaching profession.  In their ongoing role to meet the needs of the nation's workforce, community colleges have become deeply involved in providing professional development for K-12 teachers, and in providing teaching certification for post-baccalaureate students.  In addition, the teaching crisis has become so acute that a number of community colleges have received state approval to offer baccalaureate programs in teacher training.

AACC therefore proposes establishment of a new competitive national grant program in Title II of the Higher Education Act, with flexible funding authority for the ED Secretary.  The program would have a $20 million authorization ceiling in FY 2005.  Eligible activities would include the following community college programs:

1)  providing the first two years of teacher training, with an emphasis on articulation into BA programs;

2)  providing post-baccalaureate certification education and training;

3)  providing professional development for current K-12 teachers;

4)  motivating high school students to engaged in teaching careers; and, 

5)  scholarships and/or stipends for needy students not adequately funded through other sources.

Funded projects should emphasize dissemination possibilities, and providing education through new modalities, especially distance education.

American Association of Community Colleges
Reauthorization of the Higher Education Act Position

AACC Contact: David Baime, Vice President for Government Relations,

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