Report from the Legislative Relations Committee
Clark Aldridge, Chair

The Higher Education Act is due to expire on September 30, 2004 unless Congress reauthorizes the law or expends the provision of the current law for an additional year. Last year it was widely believed that the House, if not the Senate would pass a reauthorization bill in 2003. While there have been a number of bills introduced that impact higher education neither of the legislative body has introduced a reauthorization bill for consideration.

There are a number of reasons for lack of action. One is the war in Iraq consumed much of Congress’ attention for the first half of 2003. Other factors influencing the lack of progress include; political partisanship and rancor and now election year politics.

Most are pessimistic that reauthorization will occur in 2004. In fact, some Democrat Senators have hinted that they are working to delay passage. Thus far the Senate Committee on Health Education, Labor, and Pensions has held only one reauthorization hearing. Some have described Committee Chairman Judd Gregg (R-NH) as “having little interest in moving a bill.”

In the House, 21st Century Competitiveness Chairman Howard P. “Buck” McKeon (R-CA) bill aimed at controlling cost, the Affordability in Higher Education Act of 2003, H.R. 3311 has proved controversial at best. Also, the Expanding Opportunities in Higher Education Act of 2003, H.R. 3311 was deemed controversial. Recently however, some things have begun to change. Chairman Judd Gregg has indicated an interest in moving the bill forward and Senate Majority Leader Bill Frist (R-TN) has now allocated time on the Senate calendar for consideration of a bill this summer.

House Education and the Workforce Committee Chairman John Boehner (R-OH) and 21st Century Competitiveness Subcommittee Chairman McKeon indicated that they are committed to completing a bill this year. It is now expected that the House may have a comprehensive bill ready within a few weeks now. However, there are many political, procedural and budgetary issues ahead they could easily derail the process. To further complicate matters President Bush has yet to present a reauthorization proposal. In his State of the Union speech President Bush mentioned two items related to postsecondary education. One would offer a bonus Pell Grant for Pell eligible students who take a “rigorous high school curriculum.” This program would provide these students with up to an additional $1,000 per year. Also recommended was $250 million for a “new competitive Community-based Job Training grants” program.

If reauthorization is to become a reality this year, you could expect action to begin in February with the President’s FY 2005 Budget that would outline the Administrations proposal. Also in February the House released its Title IV reauthorization bill. The Senate would introduce a bill in early March and mark-up by the full committee would occur in late March.

The House bill, a modified version of the Affordability in Higher Education Act, would come to the full committee.
During April and May the House and Senate pass their version of a reauthorization bill. In July the House and Senate Conference Committee reach agreement and send it to the President.

What to expect in reauthorization: Loan limits-expect flexibility in first and second year student loan limits but significant loan lifetime loan limits unlikely. Single holder rule for consolidation will likely be eliminated.
Reconsolidation may get approval. However, interest rate likely tied to Stafford rates.

President’s FY 2005 budget provides some insight as to the Administration’s thoughts concerning reauthorization. Key components include a small increase in freshmen loan limits from $2625 to $3000 per year. It also, calls for an “Enhanced Pell Grant” of up to $1,000 for first year, full-time students who take demanding high school courses. The budget message also addresses a potential change in the Campus Based programs allocation formula. The current formula tends to provide a disproportionate share of funds to schools that have been in the Campus Based programs the longest.

Other proposals include: