Laws & Guidance HIGHER EDUCATION
Reauthorization of the Higher Education Act of 1965
Mr. John Klacik, President National Association of State Student Grant and Aid Programs Supporting Document 2 of 2
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Good afternoon.

My name is John Klacik. I am the President of the National Association of State Student Grant and Aid Programs (NASSGAP). We are the organization of agencies in each of the states and territories that administer state appropriated student financial aid.

Our major theme in developing these recommendations is the need to strengthen the shaky partnership that currently exists between the federal government and the states for the provision of student financial aid.

Neither the states nor the federal government can be successful in providing access to students, without the participation of the other. The reach of federal student aid programs would surely be dramatically curtailed without the more than $5 billion appropriated annually by states for student aid. Together we will be less than successful if we fail to consult each other on reauthorization.

We have eight specific areas of recommendations. All the details of our proposals are attached to my handout.

One of NASSGAP's primary interests is the continuation and improvement of the federal LEAP program.

LEAP, which is the successor to the old SSIG program, is the only partnership between the federal state governments for the direct provision of financial aid to students. LEAP stands for the Leveraging Educational Assistance Partnership Program. It has multiple benefits to both partners and works to the ultimate benefit of students.

First, LEAP leverages state funding. A 2-1 or 3-1 state to federal dollar match is required depending upon the appropriation level. Nationwide the Department of Education estimates that about 171,000 students received state awards as a result of LEAP.

Second, LEAP provides for flexibility and efficient administration. States may direct these funds toward those students that each state has identified as its population in need.

Third, 100 percent of all federal appropriations and state match goes to students. There is no administrative expense allowance in LEAP and NASSGAP is not asking for one.

And forth, the maintenance-of-effort requirements in the program give states a reason to preserve their own appropriation levels. This is particularly important in the tough economic time that states face now.

The only downside to LEAP is that it is under-funded at just $67 million. That hardly even qualifies as rounding error in the Pell Grant program. NASSGAP recommends that:

  1. The program be reauthorized;
  2. That its funding authorization be increased to $200 million;

In terms of other partnerships, NASSGAP recognizes the great value of the GEAR-UP program. We were integral to the creation of GEAR-UP's predecessor program, which was then known as NEISP. Funding for GEAR-UP needs to be increased to allow all states to participate. NASSGAP endorses GEAR-UP and an authorized funding level of $500 million.

NASSGAP requests that the Act be amended to name state student grant agencies to the list of groups involved in negotiated rulemaking. In this regard NASSGAP wishes to remind the Department and Congress that states have built their programs around a framework of federal rules and processes. There is virtually no Title IV policy or procedural change that will not have an impact on state programs.

A clear example of where states build upon federal processes is the universal use of the FAFSA as a primary application document. States are very interested in the questions asked on, and the availability of data from, the FAFSA. Therefore, NASSGAP recommends that:

  1. The Act retains the language ensuring that the application provides for the same number of state questions as it does in the current higher education act.
  2. That the Secretary be directed to provide free electronic state specific FAFSA-On-the-Web supplemental questions. And,
  3. That the Secretary permits states free use of the federal PIN for FAFSA filers who are also applying for state aid.

    Not the least of our concerns is the Pell grant program. NASSGAP advocates increasing the Pell Grant authorized funding levels and making it an entitlement. NASSGAP believes that the cost of the Pell Grant can be offset through an automatic and mandated verification match with the IRS.

    NASSGAP also endorses the proposal of the College Savings Plan Network regarding the needs analysis treatment of "529" state based savings and prepaid tuition plans. The proposal specifically seeks to end the very unfair and inconsistent treatment of distributions from prepaid tuition plans that have the effect of directly reducing student aid eligibility on a dollar-for-dollar basis.

    And finally, while our recommendations are all born from the spirit of partnership I admit that one is also born from the frustration of a past failure in that partnership. We recommend that the Higher Education Act specifically state that the Department can take over collection efforts in the Paul Douglas Teacher Scholarship program. Congress abruptly stopped funding the program in 1995 leaving a substantial number of students in the lurch without funds to continue their educations and unfortunately sending a message that teachers were not valued. States were left to deal with the mess.

    It is NASSGAP's recommendation that the Act make it clear that the Department can assume the task of monitoring and collecting and forgiving the loans.

    A couple final thoughts. The first is that partnerships are necessary and that NASSGAP and the states stand prepared to be partners. We just are looking for a positive signs, starting with the Department, that states are recognized and supported in their efforts. Second, that all policies and procedures suggested as changes to Title IV of the act will have a direct impact on states. NASSGAP ask that you consult with us on the proposals and certainly in the implementation of changes. And last, that while this reauthorization is being discussed under the specter of the toughest economic circumstances we've faced in 20 years, it is exactly for times like these that student aid programs were created and for which partnerships are needed. Now is not the time to cut back on our funding or our thinking.

    Once again, thank you for this opportunity to present NASSGAP's reauthorization proposals.

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Last Modified: 02/09/2009