Congressional Developments During November and December 2005

HEA Update #27 provided information on congressional developments during early fall 2005. This Updateprovides information on congressional developments during November and December 2005. In addition, it offers detailed information regarding the most recent versions of key accreditation provisions of H.R. 609 and S. 1614.

2005 proved to be a very active and complicated year in terms of Higher Education Act (HEA) reauthorization. For a period of time, Congress seemed on course to reauthorize the law: In July, the U.S. House of Representatives Committee on Education and the Workforce (HEW) approved an HEA reauthorization bill (H.R. 609), and in September the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) approved a companion bill (S. 1614). Despite a flurry of activity in December, Congress has not yet reauthorized the HEA as a whole. Congress may, however, amend certain provisions of the HEA as part of the budget reconciliation process in early 2006.

Congress Expected to “Reauthorize” Student Loan Program as Part of Reconciliation

As discussed in earlier HEA Updates, the 109th Congress charged the congressional committees to recommend $34.7 billion in spending cuts over five years for purposes of deficit reduction, a process referred to as “budget reconciliation.” As Congress neared its end-of-year recess, Senate and House conferees reached agreement on the reconciliation bill – S. 1932, the Deficit Reduction Act of 2005. Although the Senate had included S. 1614’s provisions in its reconciliation bill, the House had not included H.R. 609’s provisions in its reconciliation bill. The conferees’ Deficit Reduction Act agreement includes provisions that would reauthorize the federal student loan program, but generally does not address non-budget-related education policy matters that are contained in S. 1614 and H.R. 609, such as accreditation-related provisions.

On December 19, 2005, the House approved the conference report by a vote of 212 to 206. On December 21, 2005, the Senate approved an amended version of the conference report by a vote of 51 to 50, with Vice President Cheney’s vote necessary to break the tie (Click here to link to the Deficit Reduction Act approved by the Senate). The Senate’s amendments to the conference report address provisions other than those related to education.

The report as approved by the Senate would cut $39.9 billion from entitlement programs over the next five years, including $12.7 billion from the student loan programs. The amended version of the conference report must return to the House for approval before it may be presented to President Bush for signature. The House Republican leadership has announced that final consideration of the Deficit Reduction Act conference agreement will not occur until after the House returns to session on January 31, 2006. That announcement ended speculation that Republican leaders would ask Representatives to return to Washington, D.C. sooner to consider the measure.

While the conference report does not include language to reauthorize the HEA as a whole, the bill would repeal the “50 percent” rules, which limit the number of distance education courses that an institution may offer in order to participate in federal student financial aid programs. Under the conference report, a distance education program would be eligible for federal student aid purposes if a federally recognized accreditor that has evaluation of distance education within the scope of its recognition has determined that the institution has the capability to deliver effectively distance education programs. The 50 percent rules would remain in effect with respect to correspondence courses.

Stand-Alone HEA Bills Remain Pending

The Deficit Reduction Act, if finalized, does not end the HEA reauthorization process because it does not reauthorize the HEA in its entirety. The stand-alone HEA reauthorization bills – S. 1614 and H.R. 609 – continue to exist in the Senate and the House, respectively, and Congress conceivably could act on such bills in 2006.

On November 17, 2005, S. 1614 was reported out of committee. However, the reported bill differs in certain respects from the bill approved by the HELP Committee on September 8, 2005. In particular, the amended bill clarifies that institutions have a right to counsel in the accreditation process only with respect to appeals of adverse actions. And, unlike the HEW Committee, which provided a written report when H.R. 609 came out of committee on September 22, 2005, the HELP Committee did not include a written report on S. 1614.

CHEA has updated the chart describing major accreditation-related provisions supplied with HEA Update #26.(Click here for the updated chart.) The chart compares current law to accreditation-related and other provisions of H.R. 609 and S. 1614, including provisions related to distance education, transfer of credit, information to the public, due process, missions of religious institutions, states as accreditors, governance, student achievement, and intellectual pluralism and student speech.

Congress Extends Higher Education Act

The HEA was set to expire on December 31 under the provisions of the Higher Education Extension Act of 2005, which continued all mandatory and discretionary HEA programs beyond the HEA’s September 30, 2005 expiration date. On December 30, 2005, President Bush signed the Second Higher Education Extension Act of 2005 (Second Extension Act) to continue all mandatory and discretionary HEA programs through March 31, 2006. Generally speaking, the Second Extension Act contains no pertinent substantive amendments.

What’s Next?

The prospects for HEA reauthorization in 2006 are unclear. As indicated above, the Senate and the House could move on their respective HEA reauthorization bills. Indeed, the Second Extension Act suggests that Congress contemplates such action by March 31, 2006. The for-profit education community is expected to continue to advocate changes in such provisions as the “single definition,” the 90/10 rule, and transfer of credit. However, many higher education lobbyists question whether HEA reauthorization will be a priority during an election year, particularly given that the Deficit Reduction Act – assuming that it becomes law – will address significant federal student loan program issues.

In the meantime, the U.S. Department of Education’s Commission on the Future of Higher Education is expected to issue its report by August 2006 and has suggested that its recommendations may address accreditation. If Congress does not reauthorize the HEA before the Commission issues its report, the Commission’s recommendations may figure in the reauthorization legislation.

CHEA continues to monitor Congress and to work with the higher education community on accreditation issues in reauthorization and other legislation that may be proposed. We will keep you informed of our efforts and progress.