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.