House Votes to Tighten Leash on Lenders

    The House of Representatives approved a renewal of the
    Higher Education Act last week, which would place more stringent regulations on
    the student loan industry, give colleges incentives to become more transparent
    in their financial transactions and focus on controlling the rising cost of college
    tuition.

    The HEA legislation, known as the College Opportunity and
    Affordability Act, passed the House by a vote of 354-58 — an overwhelming
    bipartisan majority illustrating cross-party sentiments concerned with the need
    to lessen obstacles for students seeking an accessible and affordable college
    education.

    Originally signed into law in 1965, the HEA is the main
    piece of legislation governing federal regulation of postsecondary education.
    The bill was last fully reauthorized in 1998, and though it is usually renewed
    every five or six years, it has been under a series of extensions since its
    last complete reauthorization.

    Many of the amendments passed in last week’s legislation are
    connected to the fees associated with higher education — fees that appear to be
    slated for a constant upward path. An October 2007 report from the College
    Board indicated that over the past five years, tuition and fees have increased
    across all sectors.

    “For too many years, the cost of a college education has
    been spiraling out of control and closing the doors of higher education to
    aspiring students,” the committee’s senior Republican member, Rep. Howard P.
    “Buck” McKeon (R-Calif.) said in a press release. “Despite a considerable
    federal investment, colleges and universities have continued to push tuition
    upward.”

    The greatest fee increase at UCSD occurred in 1991-92, in
    which UC students experienced a 40-percent increase in fees as the state
    struggled with a massive economic recession.

    “With the College Opportunity and Affordability Act, we can
    turn this trend around,” McKeon said. “To solve the college cost crisis, we’re
    empowering consumers with meaningful information about college costs and
    holding institutions and states accountable for keeping higher education
    affordable.”

    Colleges that are in the top 5 percent of their sector —
    such as public, private, for-profit, two-year or four-year institutions — for
    tuition raises over a three-year period would be required to report the reasoning
    behind their increases to U.S. Department of Education Secretary Margaret
    Spellings, as well as form a “quality efficiency task force” to discover why
    their cost of attendance is rising more quickly than that of their peers.

    “We are redoubling our commitment to college students and
    parents by reining in skyrocketing tuition prices and making our whole system
    of higher education far more consumer-friendly,” House Education and Labor
    Committee Chairman Rep. George Miller (D-Calif.) said in a press release
    regarding the legislation.

    The House also approved an amendment that requires colleges
    to report annually to the Department of Education the amount of their endowment
    spent on decreasing student fees. In addition, another amendment related to the
    rising cost of college attendance was passed that would require colleges to
    provide prospective students with information about probable tuition costs over
    multiple years.

    “The University of
    California
    supports making college
    admissions and financial aid practices more understandable to students and
    their families, so we are not at odds with respect to the basic thrust of what
    Congress is trying to achieve,” interim director of UCSD’s Financial Aid Office
    Ann Klein said. “Until we see what finally emerges from the legislation, we
    can’t conclude that the new law will actually improve ‘transparency,’ although
    we’ll do our best to provide meaningful information to our applicants and
    students here at UCSD.”

    Other provisions illustrated concerns over rising textbook
    costs, and would increase the amount of information both textbook companies and
    colleges would make available for students about different price options.

    Prompted by recent investigations into unlawful incentives
    from lenders to colleges, the Department of Education would have increased
    authority to regulate private student loans and put student loan companies
    under more comprehensive scrutiny.

    Changes to the Federal Pell Grant program would include
    making the funds available year-round instead of just during the academic year,
    as well as a $9,000 cap on the grant. Year-round scholarship aid would make the
    grant more available to nontraditional attendees, who may need funds outside of
    the regular school year.

    In a speech at the National Community College Legislative
    Summit, Spellings derided the HEA as full of red tape.

    “It fails to address the real concerns of students and
    families, such as a broken and byzantine aid system,” she said. “They’re adding
    new layers of bureaucracy instead of emphasizing effectiveness and efficiency.”

    Instead, Spellings promoted a more company-like approach to
    higher education, explaining that business leaders would have a better grasp on
    the best way to serve the consumer — college students.

    Donate to The UCSD Guardian
    $2505
    $5000
    Contributed
    Our Goal

    Your donation will support the student journalists at University of California, San Diego. Your contribution will allow us to purchase equipment, keep printing our papers, and cover our annual website hosting costs.

    More to Discover
    Donate to The UCSD Guardian
    $2505
    $5000
    Contributed
    Our Goal