Monday, July 27, 2009

AACC Summary of H.R. 3221

Below is a summary of major provisions of H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, as reported by the House Education and Labor Committee last week:


College Modernization and Construction (Section 351)

$2.5 billion is provided in Fiscal Year 2011 to states for new community college facilities and modernizing, renovating, and repairing existing facilities. Grants can be used to:

• Reduce the financing cost of loans (such as paying interest or points on loans)
• Provide matching funds for community college capital campaigns
• Capitalize a revolving loan fund

Federal funds cannot exceed 25% of the cost of the reduced interest or matched funds.

Funds are to be distributed to states based on their relative share of the nation’s community college student enrollment. The statute appears to give states broad discretion to award funds to community colleges. Funds must be used by states to supplement, not supplant, existing funding. In addition, community colleges that received facilities funding under the American Recovery and Reinvestment Act (ARRA) or the Higher Education Act are not eligible for funding.

Grants to Eligible Entities for Community College Reform (Section 503)

$630 million per year, through FY 2013, is made available to “eligible entities” to compete for four year grants (minimum grant is $750,000) to support innovative programs or programs of demonstrated effectiveness that lead to the completion of a postsecondary degree, certificate, or industry recognized credential leading to a skilled occupation in a high-demand industry. In addition to community colleges and consortia thereof, states, area career and technical centers, and four-year colleges that serve areas not otherwise served by a community college are eligible to compete for funds; states cannot receive more than 50% of overall funding. Eligible entities must match funds provided by the Federal government, but in-kind contributions, broadly defined, may be used for the match. Hardship waivers may be granted.

Priority is given to applicants that: 1) enter into partnerships with: philanthropic or research organizations with expertise in the area of the program; businesses that help design and underwrite the program; labor organizations that provide technical expertise in programs leading to an industry credential in a high-demand industry; 2) serve non-traditional students as defined in the law; or 3) are Title III- or Title V-eligible as defined in the Higher Education Act (or are part of a consortia including one of those institutions). Among other things, applicants must partner with the state employment services and local Workforce Investment Boards.

Funds can be used for:

• Expanding opportunities for students to earn bachelor’s degrees;
• Academic or training programs, which shall be carried out in partnership with employers
• Providing student support services
• Creating workforce programs that lead to industry-recognized credentials
• Building or enhancing dual enrollment programs and early college high schools

Each eligible entity must develop quantifiable benchmarks, to be approved by the Secretary. An entity will not be able to receive the final, fourth year of funding if it has not made “demonstrable progress” towards meeting the benchmarks after three years. The benchmarks are:

1) Closing gaps in enrollment and completion rates for: groups underrepresented in higher education and groups of students at the institution who have the lowest enrollment and completion rates

2) Meeting local and regional workforce needs

3) Establishing articulation agreements between two-year and four-year public institutions of higher education within a State

4) Improving comprehensive employment and educational outcomes for postsecondary programs, including:

• Student persistence between academic years
• Number of credits earned
• Number of students in developmental education courses who subsequently enroll in credit courses
• Transfer of general education credits between institutions, as applicable
• Completion of industry-recognized credential or associate degrees to work in high-demand industries
• Transfer to four-year institutions
• Job placement related to skills training or associate degree completion.

Also, “to the maximum extent practicable,” each community college receiving a grant shall include in each electronic and printed publication of the college’s course schedule, for each course listed in the course schedule, whether such course is transferable for credit toward completion of a 4-year baccalaureate degree at a public institution in the State.

Grants to States to Implement the Systematic Reform of Community Colleges (Section 504)

Beginning on October 1, 2013, $630 million is provided annually to states to apply for grants to engage in the systematic reform of their community colleges, by carrying out the programs, services, and policies that are found by the Federal Institute of Education Sciences, after a study based on the grants awarded under Section 503 above, to have “demonstrated effectiveness.” States must have longitudinal data systems that include community colleges and meet other criteria in order to be eligible for funding. A state shall lose its funding if it has not made “demonstrable progress” in meeting quantitative benchmarks after three years.

Federal funds can comprise only half the cost of the reform programs, though financial hardship waivers are available. Federal funds must be used to supplement, not supplant, State funding. As per an AACC legislative recommendation, 90% of the state funds are to be provided directly to community colleges.

Learning and Earning Research Center

A grant shall be made to a non-Federal organization with demonstrated expertise in the research and evaluation of community colleges. The grantee is charged with a number of activities, including judging the effectiveness of community colleges and developing metrics and data elements to measure the education and employment outcomes of community college students. The center is also directed to develop standardized data gathering systems, emphasizing linkages between states.

State Data Systems

Grants are made available to States or consortia of States to establish cooperative agreements to develop, implement, and expand interoperable statewide longitudinal data systems.


Pell Grants

The Pell Grant maximum is steadily increased from $5,550 in FY 2010 (funding the 2010-11 award year) to $6,900 in FY 2019. The entire program is not made an entitlement, as proposed by President Obama; rather, some $40 billion of savings from the legislation is used to augment funding provided through the regular appropriations process.

Federal Family Education Loan (FFEL) Program

The bank-based FFEL program is phased out as of July 1, 2010, at which time all institutions will have to participate in the Direct Loan (DL) program, under which loan capital is provided by the Federal government rather than banks. A limited number of private lenders will service the loans but cannot originate them. State guaranty agencies retain a role in outreach, financial literacy, and default prevention.

Perkins Loan Program

The bill restructures the Perkins Loan Program, making it essentially a second, unsubsidized Direct Loan program that is campus-based, with the goal of providing an additional $5 billion in Perkins loans. Historically, community colleges have not generally participated in this program.

The institutional allocation formula, i.e., Perkins loan lending authority, is complex. Half of the funding is based on institutional need and funding for holding past participants harmless. The other half of the formula incorporates incentives, at one-quarter each, for low tuition and improved Pell recipient graduation rates.

Stafford Loan Interest Rates

The bill provides $3.25 billion to change the fixed interest rates on subsidized loans to a variable rate. In recent years the interest rate on these loans, currently at 5.6 percent, has decreased and will ultimately drop to 3.4 percent. However, the rate is set to revert to 6.8 percent in 2012. This provision ensures that borrowers get the lowest current interest rate, not to exceed 6.8 percent. Interest rates for unsubsidized and PLUS loans are unchanged.

Free Application for Federal Student Aid (FAFSA) Simplification

Changes to the need analysis formula allow student aid applicants to simply use IRS data for the purpose of completing the FAFSA. For those with less than $150,000 in assets, the bill would eliminate assets from the need calculation for federal student aid. (A recent Department of Education study indicated that income level was sufficient to determine eligibility.) The value of a family's house, farm, business, or employee pension benefit plan would not be included in calculating whether a family's assets exceed the cap. It is unclear how the asset information will be collected.


Additional Funding for HBCUs and Hispanic-Serving Institutions (HSIs)

The bill includes $2.5 billion in guaranteed funding for Historically Black Colleges and Universities (HBCUs) and Hispanic-Serving Institutions over FYs 2010 through 2019. The HSI funding is to be targeted to STEM programs and articulation.

Open Online Education

The Department of Education will make competitive grants for the development, evaluation, and dissemination of freely-availably online training and high school and postsecondary education courses. $50 million is made available for each over FYs 2010-2019.

New Grants for Access, Completion, and Persistence Grant Programs

The legislation provides $600 million annually for FYs 2010 to 2014 for a "College Access and Completion Fund" to: promote innovation in postsecondary education practices and policies by institutions of higher education, States, and nonprofit organizations to improve student success, completion, and post-completion employment, particularly for students from groups that are underrepresented in postsecondary education; and to assist States in developing longitudinal data systems, common metrics, and reporting systems to enhance the quality and availability of information about student success, completion, and post completion employment.

Funds are to be allocated as follows:

• 25 percent for formula/matching grants to states and philanthropic organizations for access and persistence activities under the current College Access Challenge Grant Program.
• 50 percent for new competitive matching grants for states to develop innovative plans for college completion, including state plans that embrace all higher education sectors and longitudinal data systems.
• 23 percent for federal discretionary grants - open to a wide range of organizations - for innovative access and persistence activities. Individual grants would be no less than $1 million, and could be more if matched by philanthropies.
• 2 percent for evaluation.

For more information contact David Baime, Vice President for Government Relations,, or 202-728-0200, ext. 224.

Tuesday, July 21, 2009

House Committee Approves H.R. 3221

The House Education and Labor Committee has just approved H.R. 3221, budget "reconciliation" legislation that contains the new community college initiative announced by President Obama last week, as well as additional funding for Pell Grants and other programs. The committee approved a number of amendments, including some to modify the community college initiative. Amendments to the legislation included those dealing with the following issues:
  • ensuring 90% of funds to states in the latter years of the community college initiative would be passed through to community colleges.
  • provisions to emphasize sector-based workforce development approaches.
  • tuition reimbursement policies for students called up to active military duty.
  • enactment of some workforce development and veterans programs similar to those found in the Higher Education Opportunity Act.

Details at this moment are scant, so check back in with the AACC Government Relations Blog and AACC website in the coming days for more information. It is not yet known when the full House will consider this legislation, but the Senate is not expected to take up a companion bill until September.

Friday, July 17, 2009

Community College Initiative in House Budget Reconciliation Bill

On July 15, Representative George Miller (D-CA), Chairman of the House Education and Labor Committee, introduced H.R. 3221, the “Student Aid and Fiscal Responsibility Act of 2009.” The legislation includes far-reaching reforms to the student aid programs and also includes a separate Title dedicated to community colleges.

The Committee’s summary of the bill, with related links, can be found on its website. The bill itself can be found at the Library of Congress's Thomas website by doing a search for H.R. 3221.

The legislation’s most notable feature is its elimination of the bank-based Federal Family Education Loan Program (FFELP) and its requirement that all colleges participate in the Direct Lending (DL) program, starting in July, 2010. The budgetary savings of some $87 billion that are projected from this change are directed to a variety of programs, including infusing $40 billion into the Pell Grant program.

The legislation also includes a landmark Community College Initiative. For community colleges, the legislation includes essentially three pieces—two grant programs, designed to dramatically enhance community college performance and productivity, and a facilities initiative. These are an outgrowth of President Obama’s “American Graduation Initiative.”

Highlights of these three new community college programs, all of which are guaranteed funding under the legislation as it uses “mandatory” funding, are as follows:

Grants to Eligible Entities for Community College Reform (Section 503)
This competitive grant program is funded at $630 million per year for each of the next four fiscal years. Community colleges, institutional consortia, and states (who can receive no more than half of the funds) can compete for four-year grants, with a minimum grant of $1,000,000, and a 50% match (with a waiver for financial hardship). Grants could be used for a variety of purposes that would enhance graduation or similar credential attainment. Grantees would have to develop and make demonstrable progress towards meeting a series of benchmarks approved by the ED Secretary, including: closing enrollment and graduation gaps; addressing workforce needs; and improving employment and educational outcomes along 7 indexes. Grantees that failed to meet their benchmarks would risk losing their grants.

Grants to Eligible States for Community College Programs (Section 504)
In Fiscal Years 2014-2019, $630 million in grants would be made to states for “systematic reform of junior and community colleges.” These reforms are to be driven by a study conducted by the Institute for Education Sciences (IES) that is required by the bill; the IES is to develop recommendations derived from the data gathered through the grants awarded under Section 503. As with that program, states would have to meet benchmarks and could lose funding if those benchmarks are not met. AACC has requested that language be added to the bill that would ensure that a high percentage of these state funds would ultimately be provided to institutions.

Federal Assistance for Community College Modernization and Construction (Section 351)
$2.5 billion is made available to States in FY 2011 for the construction, modernization, renovation and repair of community college facilities. Funds could be used to reduce financing costs or to provide matching funds for capital campaigns, or to capitalize a revolving fund. Funds would be allocated to states on the basis of their community college enrollments and the funds could cover only 25% of the costs of financing the projects.

Other Provisions
The legislation also creates a new “College Access and Innovation Fund,” funded at $500 million for five years, as requested by the President; and gives additional funding to the Hispanic-Serving Institutions program. It expands the Perkins Loan program, which should result in more funding being made available for community college students.

Timetable for Action
The House Education and Labor Committee has scheduled a markup (amending and approval process) on this legislation for Tuesday, July 21st. It is expected to be approved at that time. The legislation will then be considered by the full House, probably not until September, but possibly before. The Senate Health, Education, Labor, and Pensions Committee is not expected to act on its legislation until September.

For more information, contact David Baime, AACC VP of Government Relations.

Tuesday, July 14, 2009

Obama Makes Historic Community College Announcement

Today, President Obama announced the American Graduation Initiative, a landmark proposal to provide new federal support for community colleges. Speaking at Macomb County Community College, the President said that "we have to make sure we are educating people for the new jobs of the 21st century.” He went on to note that “not since the original GI Bill have we taken such an historic step for community colleges .” Due to their size and principal focus on community colleges, the President’s set of proposals is unprecedented. AACC has released a statement that endorses the plan.

Briefly, the 10-year plan consists of:

• A “Community College Challenge Fund” to develop new and improved workforce training and other related programs. Funds could also be used for high school dual enrollment programs and improved articulation with four-year institutions, developmental education improvement and increased access to “wrap around” services such as tutoring and childcare to increase persistence.

• The “College Access and Completion Fund,” previously proposed by the Administration, to fund innovative efforts to increase college graduation and close achievement gaps. Funding for the two funds would total $9 billion over ten years.

• $2.5 billion of federal funds to spur $10 billion in community college facilities construction and renovation. The federal funds could operate as loan guarantees or seed money for capital campaigns. The funds would prioritize uses for high priority areas, such as green jobs, nursing, and building trades.

• A national “Online Skills Laboratory” would make grants for the development of open, free courses for high school and college career-oriented curricula. This program would be funded at $50 million per year over ten years.

More details of the plan are available from the Administration’s fact sheet. We expect massive media interest in these proposals and have prepared a set of talking points that will help you respond to press inquiries.

Obama’s proposals now move to Congress. The House Education and Labor Committee will act first on the legislation, possibly as early as next week, followed by the Senate Health, Education, Labor and Pensions Committee, likely in September. The Obama community college proposals are expected to be considered as part of far-reaching budget “reconciliation” legislation, which grants it key procedural safeguards. (The reconciliation bill may ultimately be the vehicle used for pending changes in national health care insurance policies.) It appears that expenditures for the community college proposals will be “paid for” with savings from revamping the federal student loan programs.

The reconciliation legislation almost surely will include increased expenditures for Pell Grants, but not the full Pell Grant entitlement program proposed by the President and endorsed by AACC; a revised and expanded Perkins Loan program (not the career and technical grants); a new $500 million annual Fund for College Access and Completion grant program that the President proposed in February; and, possibly, dramatic simplification of the Federal application for student financial aid (FASFA) and related data elements.

The President’s proposals, as exciting and welcome as they are, mark just the start of what will very likely be extended legislative jostling. We ask for your ongoing support in our efforts to influence this legislation, and will be contacting you further about it shortly. In the meantime, we can feel proud that our contributions and potential have been recognized in such a dramatic fashion.

Friday, July 10, 2009

House Subcommittee Approves FY 2010 Spending Bill

The House Labor-HHS-Education Appropriations Subcommittee approved its fiscal year (FY) 2010 spending bill this morning. In addition to boosting the FY 2010 Pell Grant maximum by $200, to $5,550, the legislation provides $20 million increases for both the TRIO and GEAR UP programs. The bill also calls for additional funding for the Historically Black Colleges and Universities, the Hispanic-Serving Institutions, and other minority-serving institutions.

Recognizing that health care reform remains a top priority this year, Chairman David Obey expressed support for greater investments in health care training programs. In addition to providing $530 million to HRSA to expand health professions training programs, the House measure calls for dedicating a significant portion of the funding for the new Career Pathways Innovation Fund to this purpose.

Earlier this year, President Obama proposed in his FY 2010 budget to replace the Community-Based Job Training Grants program with a new Career Pathways Innovation Fund. Community colleges would continue to have a central role, but the focus would shift to career pathways. While the House spending bill includes $135 million for this new Career Pathways program, it also stipulates that a minimum of $65 million from these funds be directed toward “competitive grants to community colleges and partnerships with local adult education providers to train nurses, medical technicians, and others for skilled jobs in the health industry.”

The full House Appropriations Committee is expecting to mark up the measure on July 14.

Further Details on Obama Announcement

AACC has learned of some tentative new details of the upcoming community college proposal from the Obama administration. The program, as has been reported before, would provide $9 billion over 10 years to help community colleges develop and improve programs related to training and retraining. The additional details indicate that these funds would break down as follows:

- $500 mill. a year would be provided over the first 5 years for a community college training program, with grants awarded competitively to community colleges.

- In the second five years, $1.3 billion would be alloted to states, with 50% awarded by formula, 25 % to states showing high performance programs, and 25 % to community colleges, awarded competitively.

- Eligibility: community colleges would have to agree to track and report on student outcomes, set targets for graduation rates and employment-related outcomes, and serve high need populations.

- Funds could be used to create programs that blend basic skills and occupational training, to provide comprehensive, personalized services to help students plan their coursework and careers and support services that will keep them in school, and to create programs in partnerships with employers.

As we have already shared, there would be a $10 billion loan fund (at low or no interest) for community college facilities. The new details indicate that this loan fund would be available over 10 years for repairs and renovations and 25 years for construction at low interest rates in exchange for a pledge that they not supplant state funds. The emphasis of these loans would be on expanding capacity in programs that meet employer needs in the areas of health care, green jobs, science, engineering and technology.

Also as we have already heard, there would be $50 mill. for free online courses (paid for by the federal government) mostly available through community colleges.

Obama Announcement Expected Soon

George Boggs, AACC CEO, sent this communication today to AACC members about the upcoming community college announcement from President Obama:

Over the past several weeks, senior AACC staff members and I have been in communication with officials within the Administration and on Capitol Hill, and we expect that President Obama will be announcing a major and unprecedented federal community college initiative soon, possibly as early as next Tuesday. AACC, in coordination with ACCT, has worked to ensure that any proposals advanced by the Executive Branch reflect the needs of our institutions and students. Although we do not have definitive information about either the proposals or their release date, we have been encouraged by the discussions.

The Administration is holding information close to the vest, but we expect that the components will be similar to what Scott Jaschik reported on June 29 in Inside Higher Ed.

The basic components of the plan at this point are:

Funding for improving programs at community colleges, with an emphasis on those that are connected to employers and high demand jobs. The total funding may be as much as $9 billion over 10 years. It has not been decided yet whether this will be formula-funded or funded by a competitive grant process (or a combination). The amounts per year are still being decided.

A renovation/construction fund. This could be as much as $10 billion. Whether this will be a grant program or a loan program or a combination is still being decided. Apparently, there may be a K-12 component as well as a community college component.

A National Skills College. This is a proposed program to provide federal funding to community colleges or consortia of community colleges to develop open source, on-line courses for high school and community college students. The amount of funding could be as much as $50 million annually.

The timetable for Congressional action on the President’s proposals is not set, but it is possible that the House Education and Labor Committee could consider them by the end of July, likely in the context of broader budget "reconciliation" legislation. The Senate is not likely to act until September. This gives us some time to advocate for what we see as most valuable to our colleges and our students.

After President Obama announces the proposal, you can expect contact from your local press about the potential impact of this initiative and about your community college. I am sending you this communication now to give you a heads-up about this pending announcement and to ensure that you can get prepared to speak about the general thrust of the proposal, as well as your workforce programs and links to employers, facilities needs, links to K-12 educational institutions, on-line education programs, and other relevant activities.

Wednesday, July 8, 2009

Legislative Alert! Urge The House to Restore ATE Funding

Congress is moving to the final stages of the legislative process for the Commerce, Justice, Science and Related Agencies appropriations legislation (H.R. 2847), which funds the National Science Foundation and its Advanced Technological Education (ATE) program. The House has passed its version of the bill, which slashes the ATE program by over $29 million, or 57%. This cut would effectively terminate the program, leaving only enough money to fund current grants. The Senate Appropriations Committee has approved its version of the bill, which funds the Administration's request of $64 million for the program, a $12.4 million increase.

The full Senate is expected to act on this legislation soon, after which a conference committee must resolve the differences between the two bills. Please contact your Representatives (phone, fax or email) BY JULY 15 and urge the House to recede to the Senate position and provide $64 million for the ATE program when H.R. 2847 comes before the conference committee. In addition to contacting your Representatives, please send a copy of your letter to House Appropriations Committee Chairman David Obey and House CJS Appropriations Subcommittee Chairman Alan Mollohan and any other member of the Appropriations Committee with whom you have a connection. Committee contact information is available here.

Key talking points in support of the program include:

  • The ATE program focuses on technician education, an often overlooked but vital aspect of the science, technology, engineering and mathematics (STEM) workforce. ATE programs provide students with the core STEM knowledge and technical expertise they need to succeed. ATE program graduates staff government labs and provide cutting-edge industries with the skilled workers they need.
  • ATE projects and regional and national centers educate students, develop curricula, and provide faculty professional development in such areas as biotechnology, renewable energy, nanotechnology and advanced manufacturing.
  • The ATE program is the main link between community colleges and the NSF. Without it, NSF support for institutions that educate nearly half of all undergraduates would be severely diminished.
  • If you are a current or past ATE grantee, tell your representative about the project and its impact on your campus.

Click here for assistance in identifying and contacting your congressional representatives. Please see AACC's letter to the House for further assistance.

Monday, July 6, 2009

Action Needed! Urge Senate to Include "1% for Education"

On June 26, the House approved legislation designed to transform how the nation produces and utilizes energy, and efforts to shape the climate change bill now shift to the Senate. AACC is working with Second Nature, the Campaign for Environmental Literacy, and other organizations to encourage the Senate to include language in its bill that would dedicate “1% for Education” from the proceeds of carbon emissions allowances. This effort could result in the creation of a major funding source for workforce training and education at all levels.

Please join other college presidents in signing this draft letter to Senators Barbara Boxer and James Inhofe, the Chair and Ranking Member of the Senate Environment and Public Works Committee regarding the "1% for Education." The deadline for signatures has been extended until July 9.