COHEAO 2001 Annual Meeting Legislative Update
2001 Labor-HHS-ED Appropriations
On December 21st, 2000, President Clinton signed the last fiscal year
2001 spending bill (H.R. 4577). Included in that bill was the Labor-HHS-ED
Appropriations bill (H.R. 5656), which provided $108.9 billion of funding
to several key labor, education, and health programs. The Department
of Education's budget will increase to $44.5 billion, a $6.5 billion
(18 percent) increase from last year.
Included in the bill was the largest ever increase in the maximum Pell
Grant award, bringing the total to $3,750 from $3,300 in last year's
budget. The legislation also included over $1 billion in funding for
the Work Study Program, $295 million for GEAR UP, $100 million for Perkins
Loan capital contributions, $60 million for Perkins Loans cancellations,
and $730 million for TRIO, the second largest ever increase in the program.
Also included was a provision from the House-passed Higher Education
Technical Amendments bill, which extends for two years an exemption
that allows some historically black colleges and universities (HBCUs)
with high student-loan default rates to remain eligible for federal
student-aid programs. Under the Higher Education Amendments of 1998,
HBCUs with default rates higher than 25 percent for three years in a
row are supposed to incur penalties; however, the education secretary
can waive those penalties if the institutions produce acceptable plans
to cut their rates by July 1, 2002. The provisions included in the appropriations
bill will extend the deadline to July 1, 2004.
Bankruptcy Reform
President Clinton issued a "pocket veto" for the bankruptcy reform
legislation (S. 3186). By waiting until the lame-duck congressional
session adjourned before vetoing the bill, the President deprived lawmakers
of the ability to override the veto. The bill, which the House passed
the measure by a voice vote and the Senate approved by a 70-28 vote,
contained a private loan amendment to provide for the non-dischargeability
of certain educational loans. Another campaign for bankruptcy reform
legislation will be a priority in the 107th Congress.
Digital Signatures
The E-Signature law (Pub. L. No. 106-229) took effect on October 1,
2000. The law makes online contracts and transactions legally enforceable
and requires consumers to "opt in" to such electronic transactions.
In addition, it provides a special one-exemption for Federal student
loans from certain consumer disclosures of up to one year or until the
Department of Education approves a new promissory note containing the
new consumer information. The Department of Education and higher education
groups have been discussing the changes that will be made to the new
promissory note.
HEA Technical Amendments
Although the House passed the Higher Education Technical Amendments
of 2000 bill (H.R. 4504) on June 12th, the Senate did not pass the bill
before the 106th Congress adjourned.
Fraud Audit of Department of Education
Although the 106th House passed a bill on the issue of financial mismanagement
at the Department of Education, the Senate did not vote on legislation
requiring an audit of the Department. The House passed a measure (H.R.
4079) to mandate a fraud audit of the Department of Education and require
a report within six months of the bill's enactment. Similarly, Senator
Tim Hutchinson (R-AR) introduced a bill (S. 2829), which was approved
by the Health, Education, Labor and Pensions Committee and was a substitute
for the House bill, that requires an audit of the Department of Education.
The Senate, however, did not pass the bill before the 106th Congress
adjourned.
H-1B Visas
On October 17th, the President signed the H-1B Visas bill into law
(Pub. L. No. 106-313). The legislation allows the Immigration and Naturalization
Service to issue up to 195,000 six-year temporary visas annually for
the next three years to skilled foreign workers. The bill would also
exempt from the cap foreign graduates of U.S. master's or doctoral programs
or foreign workers at U.S. colleges. As a result, the legislation would
provide almost 600,000 new visas over the next three years to foreign
workers sought out by the high-tech industry.
Privacy and Identity Protection Act of 2000
Although the House Ways and Means Committee approved the Privacy and
Identity Protection Act of 2000 (H.R. 4857), neither the House nor the
Senate voted on the legislation. The bill, which was introduced by Congressman
E. Clay Shaw, Jr. (R-FL), would have limited the use of social security
numbers by the government and private sector, specifically includes
social security number account information as part of the definition
of a "consumer report."
Higher Education Tax Provisions
The Education Savings and School Excellence Act of 2000 (H.R. 7), which
would expand the amount that may be set aside annually to Education Savings
Accounts (ESAs) from $500 to $2,000, allow ESAs to be used for elementary
and secondary expenses, and remove the current 60-month limit on the deductibility
of student loan interest, was not voted on during the 106th Congress. Although
there was some speculation that some or all of these items would be included
in a tax relief package considered by the 106th Congress, none of the proposals
were incorporated into the final tax bill.
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