Congress Tackles the Higher Ed Act

The legislation features substantial changes to financial aid policies.

By + More

Congress took steps Thursday to pass the biggest reform of the nation's higher education laws in 10 years. The House passed the bill 380 to 49, and the legislation was winding its way through the Senate Thursday evening, where it also was expected to pass overwhelmingly. The 1,100-plus-page law would require that, among other things, colleges explain big tuition price hikes and would make it easier for students to find cheaper textbooks. President Bush is expected to sign the bill soon.

The Higher Education Opportunity Act is a product of seven years of negotiations, lobbying, and compromises. As a result, even the most innocuous-seeming provisions contain seeds of controversy.

The law would create dozens of new programs, including new scholarships and other benefits for veterans and their children, and allow students trying to speed up their degrees by taking summer school to collect financial aid year-round. It also would renew existing programs such as the low-cost Perkins and Stafford student loans and scholarships such as Pell and Supplemental Education Opportunity grants. Conservative groups such as the Cato Institute that have long pushed for simplifying and consolidating the many financial aid programs said the new law will make the financial aid process even more complex and increase the nation's budget deficit.

Meanwhile, others criticized the bill for not spending enough money. The law would allow the federal government to raise the individual student maximum annual Pell grant—the scholarships awarded to nearly 6 million needy students annually—to $8,000 per year by 2014. But because the bill doesn't appropriate the money to pay for the increase, the U.S. Student Association worries that gesture may very well be empty.

New rules that would require colleges to publicize much more information, such as the "net" price paid by students, were criticized by universities who say collecting and reporting the data will be a costly hassle.

A crackdown on student lenders, preventing them from giving kickbacks to schools and requiring them to provide clearer information about private educational loans, was praised by groups such as the Institute for College Access and Success. But TICAS spokeswoman Lauren Asher said she wished Congress had gone further and required, for example, private lenders to get clearance from schools before sending out big checks to students.

Even the act's insistence on a radical simplification of the federal financial aid application drew some murmurs. Cutting the application for low-income students from seven pages to two would reduce headaches for students, but some federal officials worried that states and other scholarship granters wouldn't get information they say they need to decide who should get what aid money.

A summary of the proposed new law can be found here.