Congress considers renewal of the Higher Education Act. Momentum is slowly building to reauthorize the Higher Education Act (HEA) with college costs and student debt under bipartisan scrutiny. The most recent reauthorization of the HEA passed in 2008 and expires in 2014. On Thursday, the Health, Education, Labor and Pensions Committee held a hearing on reauthorization. It is the first of 12 hearings to be held regarding the HEA. Teacher colleges have been targeted by the Obama administration and members of Congress to be held accountable for their graduates once they graduate and enter the classroom. The HEA governs major college-access programs, including Pell Grants, and programs that help prepare disadvantaged students for postsecondary work, such as GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs), TRIO and Upward Bound. Last month, President Obama called for developing a college-rating system to help prospective students navigate postsecondary options. The ratings would be based on access, including the percentage of students receiving Pell Grants, affordability, including average tuition and loan debt and outcomes, including graduation and graduate earnings. The system could be used to tie tens of billions of dollars in federal student aid to college performance. On Friday, the House Education and the Workforce Committee's Early Childhood, Elementary and Secondary Education Subcommittee held a hearing on career and technical education and training programs.

Common core testing flexibility. The Department of Education announced that it will give states the chance to suspend some or all of their current tests in mathematics and English/language arts for the 2013-14 school year, as new tests are experimented with. The department also released a policy guidance letter from Education Secretary Arne Duncan and a letter from Deborah Delisle. To obtain the "double-testing flexibility," states must give their own tests or experimental tests of new common-core assessments being designed by state consortia, to 95% of their students in grades 3-8 and one grade in high school, as federal rules require. Each student must take a full-length test, either their state's current test or the new tests, in both math and English/language arts. States are considering a range of responses to the offer of flexibility, including a mix of the new tests and their own tests. Currently, states are struggling to administer their own tests along with the new experimental tests being designed by the Smarter Balanced Assessment Consortium and the Partnership for Assessment of Readiness for College and Careers, or PARCC. A state wishing to request the field-test flexibility must submit its request to the Department of Education by Nov. 22.

We publish the DC Shuttle each week featuring higher ed news from Washington collected by the New England Council, of which NEBHE is a member. This edition is drawn from the Higher Education Update in the Council's Weekly Washington Report of Sept. 23, 2013.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.

Democrats and women were the big winners of the 2012 elections, scoring impressive victories throughout New England. Among highlights:

• New England put the U.S. Senate solidly in the hands of Democrats with the election of Chris Murphy of Connecticut and Elizabeth Warren of Massachusetts. Sen.-Elect Angus King of Maine who ran as an Independent is expected to join Bernie Sanders (I) of Vermont in the Senate Democratic caucus.
• In Massachusetts, Warren defeated Republican Scott Brown who had scored an upset victory two years ago when the late Sen. Edward M. Kennedy’s seat became available.
• In New Hampshire, Democrat Maggie Hassan is the second woman in the state’s history to be elected governor. Carol Shea-Porter (D) and Ann Kuster (D) were elected to serve in congress, joining current U.S. Sens. Jeanne Shaheen (D) and Kelly Ayotte (R) to give New Hampshire the first all-woman delegation in U.S. history.
• At New England’s statehouses, Democrats took charge, increasing their numbers and taking advantage of open seats, many of which went uncontested by Republicans.
• Maine voters rejected the Republican-controlled state Legislature and put Democrats back in charge of the House and Senate.
• New Hampshire voters restored Democrats to power in the House. Republicans retained a majority in the Senate, which could change with two recounts pending.

Drilling down ...

CONNECTICUT

Democrats swept elections statewide in Connecticut, as Republicans lost two big opportunities to gain a foothold in the state’s congressional delegation. Former Democratic Congressman Chris Murphy will replace longtime Sen. Joseph Lieberman (I) in the U.S. Senate. Murphy scored a decisive win over Republican Linda McMahon, a wrestling executive, who lost her second bid to win the senate seat. McMahon spent approximately $100 million in two runs for the senate, most of it her own money. Democrat Linda Esty, wife of Dan Esty, commissioner of Connecticut’s Department of Environmental Protection, narrowly defeated former Republican state Sen. Andy Roraback to represent Connecticut’s 5^th district. All other Democratic incumbents of the congressional delegation easily fended off challenges by Republicans.

Congressman John Larson will lose his leadership post with House Democrats as a result of Nancy Pelosi’s announcement that she will seek re-election to her post as leader of House Democrats. His position as the fourth ranking Democrat and leader of the Democratic Caucus is term limited. Larson appears to be reluctant to challenge his colleagues for a higher post and will continue to serve on the House Ways and Means Committee which will have input into the Bush-era tax cuts which are due to expire at the end of the year.

Democrats also maintained control in the Connecticut General Assembly with a 99-52 majority in the House and a 22-14 margin in the Senate. House Democrats recently chose Rep. Brendan Sharkey, the current House Majority Leader, to be the new Speaker of the House, and Rep. Joe Aresimowicz, a labor leader, to be Majority Leader. Senate Democrats re-elected Don Williams as Senate president and Martin Looney as Senate majority leader. All leadership posts will be up for confirmation when the General Assembly begins a new legislative session on Feb. 8, 2013.

Fiscally speaking Gov. Malloy and his administration confirmed that the state faces a deficit of $365 million for the current fiscal year—large enough to force Malloy to make spending cuts. By law, if the deficit is 1% of the $19.1 billion general fund, the governor is required to submit a plan to cut spending to the General Assembly. Administration officials who appeared before the Appropriations Committee blamed the deficit on poor revenue collections and an uptick in services requested under the state’s Medicaid program. Administration officials also predict another gap of $1.1 billion for FY14 and FY15.

There was more bad news as Conning Inc. a Hartford-based research firm reported the state has the nation’s worst credit quality. According to Paul Mansour, author of the Conning report, “The reality is quite alarming. The state is among the worst in job creation [and] tax revenue growth and has not yet seen a recovery in home prices. It has very high debt and retirement obligations, little budget flexibility and no rainy day fund balance."

State Comptroller Kevin Lembo notified the governor recently that the state had added only 1,900 jobs during the past year and, as of September, the unemployment rate was 8.9%.

MAINE

Former Maine Gov. King overwhelmed his challengers to win the U.S. Senate seat vacated by longtime Republican Sen. Olympia Snowe. Both incumbent Democratic members of congress easily won over Republican challengers in Maine’s two congressional districts. Chellie Pingree decisively beat Republican Jon Courtney in Maine’s 1^st district, and Michael Michaud beat former Senate President Kevin Raye in the 2^nd district.

In the state Legislature, Democrats routed House Republicans and now hold a majority of 87-60-4. Democrats also recaptured the state Senate by a margin of 19-15-1. Republican Gov. Paul LePage’s contentious relationship with Democrats may come back to haunt him when the Legislature reconvenes on Jan. 4, 2013. Sen. Justin Alfond (D) whom LePage referred to as a “spoiled brat” was elected to be Senate president. The House chose Rep. Mark Eves, to be its new speaker. The new Democratic legislature will also select a new state treasurer, attorney general and secretary of state, essentially stripping the governor of his leverage.

While Democrats enjoyed an impressive victory, the party’s longtime legislative leader and former Speaker of the House John Martin was defeated in his bid for re-election by Republican Rep. Allen Nadeau by 300 votes. Martin, was speaker from 1975 to 1994, represented Eagle Lake in the Maine Legislature for 23 terms with four in the state Senate.

Statewide ballot questions

Maine voters:

• approved gay marriage
• approved $5 million to purchase land for conservation
• approved $51.5 million for transportation projects and the Lifeflight Foundation which will make the state eligible for $101.6 million in federal and other matching funds
• approved $7.9 million for revolving loan funds for drinking water and wastewater treatment facilities.
• but rejected $11.3 million to provide funds to build a diagnostic facility for the University of Maine System; for capital improvements and equipment, including machine tool technology, for the Maine Community College System; and for capital improvements, equipment for Maine Maritime Academy.

Fiscally speaking At the end of the first quarter, state revenues fell behind projections by $27 million. Sales tax revenues were off estimates by $10 million, income tax revenues by $4.7 million, and corporate income tax revenues by $13.2 million. Finance Commissioner Sawin Millet is expected to discuss the situation with the state’s revenue forecasting committee.

MASSACHUSETTS

The Massachusetts congressional delegation turned a solid blue as voters made history by electing the Commonwealth’s first woman to serve in the U.S. Senate. Professor and consumer advocate Elizabeth Warren prevailed over Republican Scott Brown. (If President Obama taps Massachusetts senior senator John Kerry for secretary of defense as has been rumored, the newly elected Warren would become the senior senator from Massachusetts.) In the U.S. House, John Tierney narrowly edged out former Republican state Sen. Richard Tisei. Joseph P. Kennedy III easily won the House seat vacated by former Congressman Barney Frank in the 4^th congressional district, with Republican Scott Bielat losing for a second time.

As a result of redistricting, Massachusetts lost a congressional seat. The district formerly represented by Congressman John Olver (D) who retired, was absorbed in part, by a newly reconfigured 1st district to be represented by Congressman Richard Neal of Springfield.

Democrats also held onto their large majority in the Massachusetts state Legislature. After making significant gains in the House two years ago, Republicans lost four seats in the House, but held onto four in the Senate. Democrats also won three seats in the state Senate that went unchallenged.

Statewide ballot questions

Massachusetts voters:

• approved a measure to distribute medical marijuana
• approved a measure, “right to repair” which requires automakers to provide independent repair shops with access to computer codes to repair vehicles
• but rejected a measure to legalize physician-assisted suicide.

Fiscally speaking Revenues for the first quarter of FY13 are running $256 million behind projections. October revenues are off by $48 million. While the Patrick administration is not revising revenue estimates, the governor has ordered tighter controls on spending and hiring.

NEW HAMPSHIRE

The state that holds the distinction of having the “first-in-the-nation” Presidential Primary now has another first. As a result of the November election, New Hampshire is the first state in the history of the nation to have all woman members representing its congressional delegation.

In addition, former state Sen. Hassan defeated Manchester attorney, Ovide LaMontagne (R), to be the state’s next governor. Democrats also took back control of the New Hampshire House by a margin of 217-117. Six races were still being contested in mid-November. Democrats will also hold the majority on the state’s Executive Council after picking up three seats. The New Hampshire Senate appears to remain under Republican control by a margin of 13-11. Former House Speaker Terie Norelli (D) plans to seek the speaker’s post as does Rep. David Campbell. Current Senate President Peter Bragdon has expressed interest in continuing in that post.

Statewide ballot questions

• Though 57% of New Hampshire voters approved a constitutional amendment to ban a state income tax—it fell short of the 66% or two thirds required by law.

Fiscally speaking For the first four months of FY13, New Hampshire is $6.1 million ahead of projections in state revenue collections. October was a strong month for business taxes, which rebounded after a sluggish September. Real estate transfer taxes, rooms and meals and tobacco taxes all performed above estimates.

RHODE ISLAND

Democratic members of Rhode Island’s congressional delegation easily won their re-election bids. U.S. Sen. Sheldon Whitehouse (D) was re-elected to a second term beating back a challenge from Republican Barry Hinckley. Congressman David Cicilline (D), who was considered vulnerable, won a second term with a convincing victory over Republican challenger, Brendan Doherty, former head of the Rhode Island State Police. Congressman James Langevin (D) also won his bid for re-election to a seventh term, easily defeating Republican Michael Riley.

A high voter turnout favored Democrats who increased their numbers in the Rhode Island General Assembly. With all the results in, a shrinking Republican party continued a losing trend, dropping in the state Senate from eight to five, and in the House losing four of 10 seats. The Rhode Island General Assembly with a total of 113 legislators includes just 11 Republicans.

House Democrats re-elected current Speaker Rep. Gordon Fox to another term and re-elected House Majority Leader Nicholas Mattiello. House Minority Leader Brian Newberry is expected to be re-elected. Senate Democrats tapped current Senate President Theresa Paiva Weed to lead the Senate for another term and re-elected Senate Majority Leader Dominick J. Ruggerio.

Ballot questions                  

Rhode Island voters approved:

• authorization of table games for Twin Rivers casino in Lincoln
• authorization of table games for Newport Grand casino (but voters in Newport rejected the proposal by a slim margin)
• $50 million bond to make improvements at Rhode Island College
• $94 million bond for new Veteran’s Home in Bristol and renovations to existing home.
• $20 million bond to improve drinking water and wastewater-treatment facilities
• $20 million bond to protect Narragansett Bay and improve parks and recreational facilities
• $25 million for construction/renovation of 600 affordable housing units statewide.

Fiscally speaking General tax revenue increased by $6.8 million or 0.08% over the first four months of FY13. Personal income tax revenue was $3 million less than the same period in FY12. However sales and use taxes were up by $8.6 million over the previous year.

VERMONT

Sen. Sanders (I), Congressman Peter Welch (D) and Gov. Peter Shumlin (D) were all easily re-elected. Other statewide officeholders, including Attorney General William Sorrell, Secretary of State Jim Condos and State Treasurer Beth Pearce, were all returned to office. Also, Democratic candidate Doug Hoffer defeated incumbent Republican Vincent Illuzzi for auditor. Lt. Governor Phil Scott (R) was the lone Republican to survive a Democratic landslide.

In the Vermont state Legislature, Democrats maintained control. Unofficial results show Democrats with a 94-48 majority in the House with several key races pending. Current Speaker of the House Shap Smith is expected to be challenged by longtime House member Paul Poirier (I). Democrats will maintain control of the Senate. No official results were available.

With the re-election of President Obama, Vermont can now move ahead with its state plan for its own health care system. The Vermont law passed in 2011 establishes Green Mountain Care as the state entity that will cover the majority of Vermonters. The federal law; the Affordable Care Act will provide Vermont with a launching pad for Green Mountain Care and a big funding source. Green Mountain Care would be set up in 2017.

Fiscally speaking General tax collections for October were $2.5 million below estimates—the first time in the new fiscal year that revenues were off. Personal income tax revenue has fallen short for the past three months.

_________________________________________________________________________________________

Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.

STEM visa bill fails On Thursday, a proposal to increase the number of visas offered to immigrants with advanced degrees in the STEM fields (science, technology, engineering and math) from American schools failed to pass the House. The bill (H.R. 6429) needed a two-thirds vote of members in order to be passed on the House suspension calendar. It fell shy of the two-thirds mark, rejected by a vote of 257-158. Sponsored by House Judiciary Committee Chair, Rep. Lamar Smith (R-TX), the legislation would have dedicated 55,000 green cards to highly skilled foreigners with American degrees in science, technology, engineering and math by eliminating the Diversity Visa Program and thus keeping the total number of visas allocated the same. Democrats have expressed opposition to eliminating the Diversity Program, favoring instead an outright addition of visas. They have introduced bills in the House and Senate that do just that and, while it is unlikely any bills will be considered before the election, the matter may be considered during the lame duck session.

House passes vet student loan debt bill On Wednesday, the House passed legislation (H.R. 5044) by a vote of 400-0 that would exclude any forgiven student loan debt of deceased veterans from that veteran's family's taxable income. Under current law, if a private company forgives student loan debt for a deceased veteran, that amount is considered as gross net income for tax purposes. Under the bill, refunds could be given for taxes imposed after 2001.

Senators discuss Student Right to Know Before You Go Act At a discussion on education sponsored by the American Enterprise Institute (AEI), Senators Ron Wyden (D-OR) and Marco Rubio (R-FL) discussed legislation they introduced earlier this year (S. 2098) that would require more stringent data to be produced by institutions of higher education. The two announced Wednesday at the right-leaning think tank that they would like to have their bill, the Student Right to Know Before You Go Act, included in next year's reauthorization of the Higher Education Act. The bill would require institutions of higher education to submit data to a state system which would then make it easily accessible and searchable. All institutions that participate in the federal student loan program would be required to report on graduation rates, tuition costs, rates of remedial enrollment, projected student loan debt and earnings projections for each academic program. The bill would not require schools to gather any additional data, but would require that the information be provided to prospective students differently. Sen. Rubio said the intent of the bill is to help students see what professions are hiring before they enroll. Some Republicans have voiced concern that new requirements could increase bureaucratic burdens on schools.  Rep. Duncan Hunter (R-CA) and Rep. Robert Andrews (D-NJ) have introduced companion legislation (H.R. 4061) in the House.

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council's Weekly Washington Report Higher Education Update, of Sept. 24, 2012.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.

At a hearing of the House Education and Workforce Committee on Wednesday, U.S. Education Secretary Arne Duncan defended the administration's budget proposal for FY2013. Committee Chair John Kline (R-MN) repeated the charges from a March 20 House Appropriations hearing: that the administration's decision to pour billions in new spending into competitive grant programs while maintaining current funding for traditional formula grants disadvantages those students served by the formula grants, particularly special education and low-income students. The administration received criticism for this move from both parties. Congresswoman Marcia Fudge (D-OH) said that the sizeable grant awarded to her state through the Race to the Top program might have done more good distributed among almost all the districts to help defray budget shortages from impending state education cutbacks. Secretary Duncan also warned lawmakers to make a deal as soon as possible to avoid significant budget sequestration cuts scheduled for January, as states are already trying to set their education budgets for the fall.

On Tuesday, Sen. Lamar Alexander (R-TN) suggested that federal funding for elementary and secondary education be changed to more closely resemble federal higher education funding, where students receive a federal aid package that they can apply at their choice of institution. "If you took the amount of money the federal government spends today on education and thought of it as a Pell grant for kids, that would be $1,700 per student and $3,400 for lower-income kids," he said at a meeting of the Council of Chief State School Officers. He argued that federal spending on K-12 education should be directed to the individual students rather than to the institutions. Sen. Alexander sits on the Health, Education, Labor and Pensions (HELP) Committee and served as secretary of education under President George H.W. Bush.

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council's Weekly Washington Report Higher Education Update, of April 2, 2012.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.

The House Education and Workforce Committee advanced the third in a series of bills to reform the No Child Left Behind law on Wednesday. The bill (H.R. 2445) would expand states' freedom to distribute federal education funding, allowing them to take money allocated to a specific program and redirect it to other activities indicated by federal education law. Committee Chair and bill sponsor John Kline (R-MN) said the changes would meet school officials' pleas for the "flexibility to target federal funds according to their priorities." Opponents of the measure are concerned that it will disadvantage low-income and minority students as funding intended for their programs is diverted elsewhere. Committee Ranking Member George Miller (D-CA) cited a July 12 Congressional Research Service (CRS) memo warning that under the bill, Title 1-A funding for schools serving a high number of students from low-income households could be diverted to other schools. The legislation was approved by a party-line vote of 23-17.

On Tuesday, the U.S. District Court for Washington, D.C. ruled to strike a newly implemented Education Department regulation on online higher education programs. The Association of Private Sector Colleges and Universities filed a lawsuit in January on behalf of their for-profit members to challenge several of the department's new "gainful employment" regulations. The court ruled against the rule requiring colleges to be approved by every state from which they enroll students in any online program, but upheld regulations restricting incentive pay for college recruiters based on enrollment and prohibiting misrepresentation of college programs and outcomes. In the case of the state approval rule, the court found that the Education Department failed to give sufficient notice of the inclusion of online programs in the rule and allow for comments.

From the New England Council's Weekly Washington Report Higher Education Update, July 18, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.

On Wednesday, the House Education and Workforce Committee approved the second of five total planned bills on federal education reform for the 112th Congress. By a vote of 34 to 5, the committee advanced legislation (H.R. 2218) which would allow governors, state education agencies, and charter school boards to parcel out funding to expand or duplicate successful charter schools. States without caps on the number of charter schools or student enrolled in charter schools would receive funding priority, and the grant period would be expanded from three to five years. Committee Ranking Member George Miller (D-CA) said that he intends for the legislation to "help replicate what is working in schools... and to prepare every student to compete in our global economy." Congressman John Tierney (D-MA) voted against the bill, citing concerns about insufficient oversight and disclosure to ensure programs are equally accessible to all students. Education Committee Chairman John Kline (R-MN) says that he hopes to have all five bills passed by the House this fall, in time to implement changes before the stringent "adequate yearly progress" (AYP) requirements of the current No Child Left Behind (NCLB) law come into effect in 2014. Education Secretary Arne Duncan estimated that 82 percent of the nation's schools will qualify as "failing" the AYP this year, a drastic increase from 37 percent last year.  Congressman Kline acknowledged that meeting his deadline would be a difficult feat, considering that the Senate Health, Education, Labor and Pensions Committee has yet to release a draft of their comprehensive education reform legislation. The Senate's legislative effort is expected to be markedly different from the House version.

Congressman Kline joined Elementary and Secondary Education Subcommittee Chair Duncan Hunter (R-CA) in questioning the Administration's authority to grant waivers for NCLB requirements to states which agree to implement certain education reforms. In a letter to Secretary Duncan, the congressmen asked that he provide additional information about his waiver plan and "an explanation of the department's legal authority for requiring states and schools to abide by certain changes in exchange for regulatory relief" by July 1. They add that the waiver initiative "could result in greater regulations and confusion for schools and less transparency for parents." Secretary Duncan announced his "Plan B" to offer waivers if Congress fails to pass education reform by the beginning of the 2011-2012 school year earlier this month, but has not gone into specifics. A spokesperson for Secretary Duncan said that the plan does comply with current law.

Sen. Patty Murray (D-WA) introduced legislation this week to reauthorize the Workforce Investment Act (WIA)—something she and HELP Committee Ranking Member Michael Enzi (R-WY) have been working toward for two years. The measure enjoys wide support within the HELP Committee; Chair Tom Harkin (D-IA) and committee member Sen. Johnny Isakson (R-GA) have also signed on. Sen. Murray hopes the bill will result in more focus on business sectors promoting job growth throughout the education system. "If kids in high school know that there are going to be health care jobs available in their community, they start thinking in different terms about being successful in high school because there's a job at the end of it," she said. The legislation would submit all federal job training programs to a common set of standards measuring retention rates, job placement, and new measures like how many enrollees receive an industry-recognized credential. Sen. Murray expressed confidence that the bill will win bipartisan support in a HELP Committee vote next week and ultimately in the Senate, although she acknowledged that a budget-conscious environment could chip away at WIA's current $3 billion funding level, making changes even more difficult to implement.

On Friday, President Obama announced a $500 million initiative to create new manufacturing jobs. The Advanced Manufacturing Partnership will combine the work of research universities and private companies to innovate new manufacturing techniques. "Investing in manufacturing based on new technologies can provide high-quality, good-paying jobs for American workers," said Eric Lander, co-chairman of the President's Council of Advisors on Science and Technology. The manufacturing effort is based on recommendations from the council, which include increased federal investment in shared university research facilities and expanded partnerships between industry and academia. Six universities have been invited to join the program's first wave, including MIT. While the program details have not been completely ironed out yet, some projects have already been identified. $100 million will be allotted to the Materials Genome Initiative, which aims to facilitate the discovery and implementation of new advanced materials. The White House notes that this will require an "unprecedented level of collaboration among all stakeholders, including government, industry, academia, professional societies, and national labs."

From the New England Council's Weekly Washington Report Higher Education Update, June 27, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.

On Thursday, the Education Department released the final "gainful employment" rules for vocational schools. In order to qualify for federal financial aid, for-profit and certificate programs will be required to prepare students for gainful employment by meeting one of three requirements: the average annual student loan payment is not more than 30% of a graduate's discretionary income; the average annual student loan payment is not more than 12% of a graduate's total income; or at least 35% of graduates are repaying their student loans. Schools will also be required to publish information on students' loan repayment rates, debt-to-income ratios, total program costs, and other data to help prospective students make informed choices. An Education Department statement notes that while the rules will apply to all occupational training programs, those at for-profit colleges "are most likely to leave their students with unaffordable debts and poor employment prospects."

The requirements were scaled back slightly after the first proposal last July was met with heavy criticism from for-profit advocates. In addition, instead of losing federal aid upon the first violation, programs would have to fail three times in four years before their funding would be cut. Tighter regulations would be phased in over four years to allow institutions to adapt. A provision to block the initial regulations was successful in the House, but Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-IA) is a fierce advocate of the new rules and has promised to kill any measure which would block them. Sen. Harkin plans to hold the fifth in a series of hearings on for-profit colleges on June 7, with Education Secretary Arne Duncan as the primary witness.

The Education Department estimated that about 8% of all vocational programs will fail the new measures at some point, with 2% ultimately losing their federal support. For programs at for-profit institutions, those estimates rise to 18% failing at one time and 5% losing federal student aid. Secretary Duncan said that the requirements were very reasonable considering the high percentage of federal student aid making up for-profit colleges' income. "We're asking companies that get up to 90% of their profits and their revenue from taxpayer dollars to be at least 35% effective," he said. Opponents of the new rules say that it will disproportionately affect underserved and low-income students and restrict their access to higher education and skill-building programs. The rules are scheduled to go into effect in July 2012.

On Tuesday, the Education Department announced that it is inviting state and nonprofit guarantors to propose cost-effective methods to help reduce student loan default and delinquencies. Guarantee agencies would enter into "voluntary flexible agreements" with the Education Department, which serves as the official originator of federal student loans since a restructuring of the Federal Family Education Loan (FFEL) program last year. That restructuring largely cut guarantors out of the federal student loan process in an effort to streamline the system and cut costs, but now they are being offered a new opportunity to participate. The Education Department hopes that the voluntary agreements with guarantors will "improve services to students, schools and lenders; use federal resources more cost-effectively and efficiently; and enhance the integrity and stability of the FFEL Program."

From the New England Council's Weekly Washington Report Higher Education Update, June 6, 2011. NEBHE is a member of the Council and will publish this column each week.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.