On August 14, 2008, President Bush signed H.R. 4137, the Higher Education Opportunity Act. The Act reauthorizes the Higher Education Act of 1965 for another six years, and includes other provisions intended to improve college affordability, access, and accountability. The Act includes several provisions that may be of interest to students and their families.
Creates a new website with comprehensive information on college pricing
In an effort to make college costs more transparent to students and their families, the Act directs the Department of Education to create a new user-friendly website that will contain up-to-date information on college pricing, including tuition and fees for the current year, average price after grant aid, recent price increases, and changes in per-student spending, among other items. This list will include information for all colleges in the country. The website will also include calculators that students can use to get an early estimate of their expected college costs based on income and family situations, and to estimate the annual and total cost at a particular college.
Encourages colleges to rein in price increases
The Act directs the Department of Education to publish annually the top five percent most expensive colleges in the country, the bottom ten percent least expensive colleges in the country, and the top five percent of colleges with the largest percentage increase in tuition prices over the previous three years. The schools in the last category must then report the reasons for these price increases to the Department of Education.
Simplifies the federal financial aid application process
In an effort to make the Free Application for Federal Student Aid (FAFSA) application less daunting and encourage more families to apply for federal student aid, the Act directs the Department of Education to streamline the FAFSA over the next five years by reducing the number of questions from the current 100+ questions. The Act also provides a two-page FAFSA-EZ form for low-income students, and simplifies the FAFSA re-application process. Also, a new calculator will allow students and families to receive estimates of their Expected Family Contribution (EFC) in the years before they officially submit the FAFSA.
Makes textbook costs more manageable
To address the rising costs of textbooks and discourage the practice of "bundling," in which textbook publishers package books with often expensive supplementary materials like DVDs, CDs, or workbooks, the Act requires college textbook publishers to provide colleges with full price information on both bundled textbooks and unbundled alternatives, which information can then be passed on to students. In addition, publishers will be required to sell unbundled versions of every bundled textbook they sell.
Promotes student loan literacy
The Act requires private student loan lenders to first inform students of their federal borrowing options. The Act also requires that all exit loan counseling be done with the school's involvement, and requires that students be informed of all possible repayment options. In addition, the Act requires colleges to fully disclose all relationships with private student loan lenders, and requires private lenders to prominently disclose all loan terms and conditions to student borrowers.
Expands the Pell Grant and federal Work-Study program
In an effort to expand access to college, the Act increases the maximum Pell Grant from $5,800 to $9,000 per academic year and, for the first time, makes it available year round. The Act also expands the community service opportunities under the federal Work-Study program.
Increases college aid for veterans and military families
The Act creates a new scholarship program for active military duty personnel and family members, including children and the spouses of active duty military service members or veterans.
Expands loan forgiveness programs
To encourage students to enter vital public service jobs, the Act authorizes up to $10,000 in loan forgiveness for teachers, nurses, law enforcement officers, firefighters, first responders, military service members, public defenders, prosecutors, and others serving the public interest.
Improves campus disaster readiness plans
The Act creates a National Center for Campus Safety and helps colleges develop and implement state-of-the-art emergency systems and campus safety plans.
Vikram Kohli, MBA, CRPC®
Ameriprise Financial Services
3130 De La Cruz Blvd.
Santa Clara CA 95054
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