American Association of Community Colleges Federal Legislative Update

1. American Association of Community Colleges Federal Legislative Update David Baime AACC Senior VP for Government Relations & Research

2. AACC Legislative Update • American Jobs Act • Budget Control Act/Deficit “Super Committee” • FY 12 Funding • TAACCCT Grant Program/TAA Reauthorization • Department of Education Regulations • Committee on Measuring Student Success

3. American Jobs Act • $447 Billion Total Package • $253 billion tax credits and cuts • $194 billion spending • Four Main Sections • Tax cuts for small businesses • Infrastructure and other spending to encourage hiring • Unemployment insurance reform and Pathways Back to Work fund • Payroll tax cut

4. American Jobs Act • Community College Modernization Funds • House Bill: FAST Act – H.R. 2948 • $30 billion overall for school modernization • $5 billion for community colleges • Distributed by ED to states based on relative community college enrollments • Four-year institutions potentially eligible based on students in sub-baccalaureate programs • At least $2.5 million to each state

5. American Jobs Act • CC Modernization Funds, cont’d • States have broad discretion to determine methods of intra-state distribution • Funds for modernization, renovation or repair of existing facilities • No new construction • Academic facilities • Facilities at four-year institutions must be accessible by students in sub-baccalaureate programs • States to take into account how “green” the project is

6. American Jobs Act • Pathways Back to Work • $5 billion fund • $2 billion for subsidized employment for low-income adults • $2 billion for summer and year-round employment for low-income youth • $1 billion for effective work-based employment strategies • Competitive grants to local elected officials and WIBs • Community colleges may partner • Sector-based initiatives, mixed employment and training programs, apprenticeships, etc.

7. American Jobs Act • Other Notable Provisions • $35 billion for K-12 and first-responder jobs • Unemployment insurance reforms – may involve training

8. Budget Control Act • Enacted Aug. 2, 2011 (P.L. 112-25) • Federal debt limit raised in stages by $2.1 T • Created 10-year discretionary caps • Provided $17 B for Pell over next two FYs by eliminating in-school interest subsidies on graduate student loans • Requires vote on balanced budget constitutional amendment by 12/31/11 • Established Joint Select Committee on Deficit Reduction— “Super Committee”

9. Budget Control Act • Discretionary caps in FYs 12-21 reduce spending by $890 billion over 10 years • For FY 2012 and FY 2013, separate spending caps for security and non-security spending • FY 2012 cap = $1.043 T ($7B below FY 2011 but $24 B higher than House FY 2012 budget)

10. Budget Control Act • Student Aid • Pell Grant program faced an $11.3 B shortfall for FY 2012 but BCA provided $10 B in FY 2012 and $7 B in FY 2013 to address shortfall • Pell Grants still face a shortfall of $1.3 B for FY 2012 • Eliminates the in-school interest subsidy for graduate and professional student loans made on or after July 1, 2012 • Eliminates repayment incentives on direct loans

11. Budget Control Act • “Super Committee” • 12-member “Super Committee” charged with producing legislation to reduce deficit by $1.2-$1.5 trillion more over 10 years • Any cuts and/or revenue increases on table • Oct. 14 – deadline for other committees to submit recommendations • Super Committee vote by Nov. 23 • Congress must vote by Dec. 23 – no filibuster, no amendments

12. Budget Control Act • If the Super Committee fails to propose at least $1.2 Trillion in deficit reduction or Congress rejects plan, SEQUESTRATION • If no deal by Jan. 15, 2012, BCA triggers cuts beginning on Jan. 2, 2013 • Triggers automatic spending cuts for each of 9 years (FY 2013-2021)

13. Budget Control Act • Sequestration would trigger $55 B/year in defense cuts and $55 B/year in non-defense, including $38 B in discretionary and $17 B in mandatory programs • Several programs are exempt including Medicaid, Social Security, and Pell Grants (for two years) • For FY 2013, estimate of 9% across-the-board cuts to education would start in the middle of the school year • For FY 2014-2021, will not be across-the-board cuts but further program cuts

14. FY 2012 Labor-HHS-Education Appropriations • FY 2012 Begins October 1, 2011 • None of the 12 appropriations bills has been enacted • No FY 2012 budget resolution but the Budget Control Act set aggregate appropriations for FY 2012 • Congress is working on a continuing resolution (CR) while the appropriations process continues • Partisan dispute about offsets for FEMA funding

15. FY 2012 Labor-HHS-Education Appropriations • Senate Marked Up its FY 2012 Labor-HHS-Education Bill on Sept. 20, 2011 • Pell Grant maximum preserved at $5,550 despite shortfall • $100 Million for the Workforce Innovation Fund • $158 billion Labor-HHS-Ed discretionary total due to new budget caps - $308 million below FY 2011 • Senate expected to proceed with full committee mark up this afternoon • House has postponed its Labor-HHS-Ed appropriations mark up several times; in lieu of separate bill, an omnibus

16. Trade Adjustment Assistance Act • Baucus–Camp Reauthorization Bill • Senate considering this week as amendment to another trade bill • Compromise bill establishes expanded benefits that fall between ARRA authorization and current law • Service industry eligibility • $575 million for training and other services • Continued authorization of TAACCCT program

17. TAACCCT Program • Grant Announcement Expected Very Soon • $500 million for first-year grants must be obligated by Sept. 30 • Proposals requesting approximately $3 billion received in first round • 90% of proposals from community colleges

18. Department of Education (ED) Regulations • Obama Administration Has Displayed Strong Propensity to Regulate Higher Education • Regulations Not Always Sensitive to Campus Realities and Student Needs • For-Profit Education Primary Target of Regulations; Community Colleges “Collateral Damage”

19. ED Regulations—Gainful Employment • Regulation a Fiasco for Community Colleges—Huge New Compliance Burdens With Little Meaningful Cleaning Up of “Rotten Apples” in For-Profit Sector • Muscle of For-Profit Lobbying Manifested • Widespread Difficulties in CC Implementation • Initial 7/1/11 Disclosures and Initial Reporting 11/1/11 • SSA Matches Mark Policy Sea Change

20. ED Regulations—State Authorization • Another Regulation Spurred by For-Profit Abuses • Institutions Must Demonstrate Compliance With State Authorization Requirements Wherever They Offer Programs; Huge and Negative Implications for Distance Learning • Regulation Thrown Out in Court • Private Efforts are Underway to Rationalize and Simplify State Efforts

21. ED Regulations—Program Integrity, Etc. • Three Year Default Rates and Higher CC Defaults are Coming • New “Satisfactory Academic Progress” Standards Have Created Problems • New Verification Procedures Laborious • Low FAFSA Application Rates Still an Issue

22. Committee on Measuring Student Success • Committee Created by Congress in 2008 HEA Amendments to Review and Suggest Changes to Two-Year Graduation Rate Calculation • Chaired by Head of CCRC and Nearing Completion of Work • ED Will Next Decide How to Implement; IPEDS Route Likeliest • Big Opportunity for Community Colleges

23. Contact Information • David Baime • 202-728-0200 x224, dbaime@aacc.nche.edu