On a Party-Line Vote, House Panel Approves HEA Reauthorization

By Vaishali Honawar — July 26, 2005 3 min read
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Teachers and principals could get cash rewards based on performance, and colleges geared to minority students could apply for federal grants to create centers of excellence to train teachers, under a reauthorization of the Higher Education Act approved by a House committee late last week.

The bill would also close a loophole that costs the federal government billions of dollars in subsidies to student-aid lenders and increase the maximum authorization for Pell Grants.

The bill passed the House Education and the Workforce Committee on a 27-20 party-line vote on July 22. The panel had spent more than two days considering various provisions, including a bitter debate over federal student loan programs.

Features of Higher Education Act Renewal

The reauthorization of the Higher Education Act approved by the House Education and the Workforce Committee last week would:

• Authorize $100 million for a Teacher Incentive Fund that would help states and school districts establish pay-for-performance systems for teachers who improve student achievement.

• Authorize $10 million for grants to colleges to set up centers of excellence for teacher training that would recruit and prepare teachers, including minority teachers.

• Increase the maximum authorized Pell Grant award from $5,800 to $6,000. It would also limit a student’s Pell Grant eligibility for the first time, to 18 semesters (nine years) or 27 quarters (seven years).

• Prohibit a federal database, or unit record system, proposed by the Department of Education to collect information on individual college students, including Social Secu-rity numbers.

• Eliminate a loophole that guarantees lenders a 9.5 percent federal subsidy on certain student loans.

• Increase federal loan limits for first-year students from $2,625 to $3,500, and for second-year students from $3,500 to $4,500.

SOURCE: House Education and the Workforce Committee

Democrats on the committee blasted the bill, saying it would force the single largest cut ever in student-loan programs.

“This bill is a cause to grieve, rather than celebrate. … [I]t moves us in the wrong direction,” Rep. Dale E. Kildee, D-Mich., said on July 21.

But Rep. John A. Boehner, R-Ohio, the chairman of the education committee, said that Republicans were restoring “fiscal sanity” to federal higher education programs amid a hefty budget deficit by making better use of resources.

“We are demanding greater efficiency and effectiveness from our investment,” he said.

Among the bill’s incentives for K-12 teacher recruitment and retention is the authorization of a $100 million Teacher Incentive Fund. The fund would help states and school districts establish pay-for-performance systems to reward teachers and principals for improving student academic achievement and closing achievement gaps between students of different racial and ethnic groups.

“We’re demanding a lot from our nation’s educators, and the Teacher Incentive Fund will compensate teachers based on their performance in the classroom and how effective they are in helping students learn and achieve,” said Rep. Tom Price, R-Ga., who had introduced the amendment in a subcommittee earlier this month.

The bill also would authorize $10 million annually for forming centers of excellence at colleges and universities that recruit and prepare teachers, particularly minority teachers. Institutions that historically have served minority student populations could apply for federal grants of $500,000 or more a year for such centers.

Experts on teacher preparation see a need for underwriting such initiatives.

“As a nation, we have underinvested in teachers, teacher preparation, and schools of education, and if we are serious about improving the performance of all of these, it seems clear that additional investment is required,” said Arthur E. Wise, the president of the National Council for Accreditation of Teacher Education.

Student Loans

In the face of a budget deficit, projected at $325 billion for fiscal 2006, the House Republican leadership directed the education committee to find $12 billion in savings from federal student-loan programs.

To achieve that, the committee’s Republican leaders want to use money in savings expected from a bipartisan agreement to eliminate a lender subsidy created in 1993, when Congress assured lenders a return of 9.5 percent on loans backed by tax-exempt bonds. Under a practice called “recycling,” lenders have continued to obtain the guaranteed 9.5 percent return on new loans they make from repayments on earlier loans financed with the bonds.

Rep. George Miller of California, the education committee’s ranking Democrat, said the funds would be better used for more financial aid than for easing the deficit.

The bill would raise the maximum Pell Grant authorization from $5,800 to $6,000. The maximum appropriated Pell Grant is currently $4,050. The bill would also restrict for the first time the period over which a student could receive a Pell Grant to 18 semesters.

A bipartisan effort by Rep. Miller and Rep. Tom Petri, R-Wis., to reward higher education institutions that use loan programs in which the funds are dispensed by the federal government, without any middlemen, failed on a 26-20 vote.

On July 13, the Subcommittee on 21st Century Competitiveness approved an amendment to prohibit the Department of Education from establishing a federal database to track students. The idea of such a database, which would contain information about individual students, including Social Security numbers, has drawn criticism from privacy advocates.

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