A First Look at the House's Version of HEA Reauthorization

Originally posted on December 7, 2017 at Blackboard

On November 8, 1965, in a crowded gymnasium at his alma mater Southwest Texas State University (now Texas State University), President Lyndon B. Johnson signed the Higher Education Act (HEA) of 1965 proclaiming, “I want you to go back and say to your children and to your grandchildren, and those who come after you and follow you—tell them we have made a promise to them… And tell them that we have opened the road and we have pulled the gates down and the way is open, and we expect them to travel it.”

Since that fall morning, the HEA has served as the primary federal legislation governing student financial aid and higher education regulation. It has been reauthorized several times – most recently in 2008 – and is several years overdue for reauthorization. And although Senator Lamar Alexander (R-TN), chair of the Senate Health, Education, Labor and Pensions (HELP) committee, and his co-chair Senator Patty Murray (D-WA) have been vocal about their commitment to reauthorizing the act, it was Representative Virginia Foxx (R-NC), chair of the House Committee on Education and the Workforce, who released the first draft of a bill to reauthorize HEA last Friday.

In her comments surrounding the draft bill, Foxx argued that although the HEA “did break ground, the evidence suggests that now we’re stuck in the mud.” Representative Foxx’s alternative, the Promoting Real Opportunity, Success, and Prosperity Through Education Reform Act (PROSPER), would drastically alter the higher education landscape. The 542-page bill roughly focuses on four areas: promoting innovation, access, and completion; simplifying and improving student aid; empowering students and families to make informed decisions; and ensuring strong accountability and a limited federal role. Much has already been written about the bill, especially as it relates to student financial aid and campus responses to sexual assault. Today we’ll take a deeper dive on how the bill aims to promote innovation, access, and completion, as well as how it aims to ensure strong accountability and a limited federal role—the two areas that are likely to impact student success and online education the most.

Promoting innovation, access, and completion

In the committee’s fact sheet on PROSPER, the first point focuses on innovation and access. PROSPER would, according to the committee, “encourage institutions to evolve in ways that meet the needs of today’s students.” How would the bill accomplish this? Largely by removing regulatory barriers to competency-based education (CBE), changing the nature of accreditation, and creating pathways for partnerships between traditional colleges and universities and alternative education providers, such as coding camps and business-led apprenticeship and certificate programs.

Most notable here is an emphasis on competency-based education. Several months ago, the Department of Education’s Office of Inspector General (OIG) released an audit of Western Governors University (WGU) which found that WGU was out of compliance with financial aid regulations and should repay the federal government over $700 million. At the heart of this finding was the OIG’s  definition of “regular and substantive interaction,” a statutory term that is used to determine whether or not a course is eligible for federal financial aid.

CBE advocates have been calling on the Department of Education and Congress to address this issue for several years, and PROSPER appears to be Congressional Republicans’ response. Page 28-29 of the bill defines CBE and includes the following provision (emphasis added):

…provides the educational content, activities, and resources, including substantive instructional interaction, including by faculty, and regular support by the institution, necessary to enable students to learn or develop what is required to demonstrate and attain mastery of such competencies, as assessed by the accrediting agency or association of the institution of higher education.

In contrast to the OIG’s interpretation that insists that “regular and substantive interaction” can only be the domain of faculty, the new definition in PROSPER seems to imply that although substantive interaction could be provided by faculty, regular interaction could include any regular institutional support associated with student success. Additionally, the bill opens up the way to simplify the disbursement of financial aid for CBE students and outlines the role of accreditation for CBE programs. Unfortunately, as WCET’s Russ Poulin points out in his analysis of the bill, this clarification of “regular and substantive” seems to only apply to CBE and is not directly linked to distance education. As a result, it is possible that although CBE programs would no longer need to worry about “regular and substantive,” traditional online programs would still be at risk of OIG audit for this issue.

Ensuring strong accountability and a limited federal role

Outside of the sweeping changes to the current financial aid system that the bill proposes, the second largest area of change has to do with institutional accountability and limited governmental oversight. Representative Foxx has never been shy about her criticism of Obama-era educational regulations, and PROSPER is clearly designed as a vehicle to eliminate as many of those regulations as possible. Among the Obama-era regulations that PROSPER would rescind include gainful employment regulations (which are currently undergoing negotiated rulemaking), the current configuration of borrower defense regulations (which are also undergoing negotiated rulemaking), an institutional rating system, the definition of credit hour, and out-of-state distance education regulations, in addition to severely limiting the authority of the Secretary of Education.

For online education providers, the two most significant proposed changes are the change in the credit hour definition and the removal of out-of-state distance education regulations. In 2010, 34 CFR 600.2 was amended to define the credit hour as not less than one hour of classroom instruction and two hours of out of class work for fifteen weeks.

Many online educators, especially those involved with CBE programs, bemoaned the addition of this regulation. Some believed that by directly tying the federal definition of a credit hour to seat time, the Department implied that face-to-face education was the gold standard by which all educational models should be judged. And, in a move that appears to level the playing field between online and face-to-face regulations, PROSPER also removes the special accreditation regulations that are currently associated with the accreditation of online education. In essence, the message about online education seems to be that it should be treated no differently than face-to-face education.

Of additional importance to online educators is the proposed removal of federal out-of-state distance education regulations. For especially large online providers, these regulations have been a source of frustration for several years and prompted the development of a national reciprocity arrangement in the form of the National Council for State Authorization Reciprocity Agreements (NC-SARA). And although the removal of these regulations could potentially decrease the amount of regulations that institutions must meet, the proposed legislation does not supersede any state regulations.

Where do we go from here

There are a number of other items in the 542-page bill that would significantly alter higher education in the United States that are drawing criticism. Among other things, PROSPER proposes to:

  •  create performance funding measures for some minority serving institutions;
  •  require institutions to pay back a portion of student financial aid for each of their students that defaults on federal loans;
  •  cap the amount of federal money that parents and students can borrow;
  •  end several financial aid programs including public servant loan forgiveness and supplemental education grants; and
  •  significantly alter regulations regarding institutional Title IX sexual harassment investigations.

As a result of these and other measures, as well as the lack of a bipartisan cooperation in developing the bill, PROSPER has a difficult path forward. Senator Alexander has indicated that HELP will take up its own version of HEA Reauthorization after the holidays, but January and February are shaping up to be significant and grueling legislative months in the Senate. And it won’t be long until both Republicans and Democrats will turn their focus to the midterm elections.


In the meantime, we’ll be keeping an eye on PROSPER and any Senate bill and will post more here as things progress. If your institution is a part of a group like the American Council on Education (ACE), American Association of Community Colleges (AACC), American Association of State Colleges and Universities (AASCU), or Association of Public Land-Grant Universities (APLU), you should keep an eye out for their analysis of the legislation. You can also check out the great analysis of the bill posted at WCET by Russ Poulin as well as the National Association of Student Financial Aid Administrators (NASFAA) discussion of the financial aid ramifications of PROSPER. Although we may be closer to reauthorizing HEA than we were this time last year, we are still a long way from the passage of a new Higher Education Act, and a lot can change in the next few months.