House Education and Labor Committee Chairman George Miller (D-CA) and Higher Education, Competitiveness, and Lifelong Learning Subcommittee Chairman Rubén Hinojosa (D-TX) introduced legislation to reauthorize the Higher Education Act and the Committee voted unanimously to approve HR 4137, the College Opportunity and Affordability Act of 2007. This bill would make some important improvements to the Perkins Loan program, both keeping it authorized and limiting the ability of the Department to require assignment of defaulted loans.

This bill in general aims to address the rising price of college and remove other obstacles that make it harder for qualified students to go to college. The bill will move on to the House floor for a vote before being conferenced with the Senate bill. The House is about to recess for a two-week Thanksgiving break, but will be in session for two or three weeks in December. It is possible the bill will be considered then. Final passage is highly unlikely before February or March of 2008.

According to statements made by Committee Chairman George Miller, the College Opportunity and Affordability Act would streamline the federal student financial aid application process; make textbook costs more manageable; allow students to receive year-round Pell Grant scholarships; strengthen college readiness programs; increase college aid and support programs for veterans and military families; improve safety on college campuses and help schools recover and rebuild after a disaster; ensure equal college opportunities and fair learning environments for students with disabilities; and strengthen our nation’s workforce and economic competitiveness by boosting science, technology, and foreign language educational opportunities. The bill incorporates “student loan sunshine” restrictions regarding preferred lender lists and expands the definition of illegal inducements, while adding in additional regulation of non-federal education loans.

Although the goals of the bill are widely supported, and it is very beneficial to the Perkins Loan Program, many college and university officials are concerned about the cost of complying with the many new reporting requirements that will be placed on them.

Relative to the Perkins Loan Program the bill includes the following:

• The Perkins Loan Program is reauthorized through 2014.
• The Department is only required to require the assignment of defaulted Perkins Loans in cases where schools failed to knowingly maintain records or decides to not to service the loans
• Requires the Department to return Perkins funds collected from voluntarily assigned loans to the institution that assigned them within 180 days, less collection costs.
• Increases annual loan limits to $5,500 for undergraduates and $8,000 for graduates, with commensurate increases in aggregate levels.
• Increases the maximum Federal Capital Contribution from $250 million to $350 million per year (this is subject to the funds actually being appropriated.)
• Increase the allowance for books and supplies to $600.
• Removes the requirement that requests for forbearance be in writing.
• Changing the number of on-time payments needed for loan rehabilitation from 12 to 9.

More details on the House Committee’s bill, including a fact sheet can be found at http://edlabor.house.gov

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