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WEEKLY UPDATE a Publication of the CGS Office of Public Policy and Government Affairs December 1, 2017

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WEEKLY UPDATE a Publication of the CGS Office of Public Policy and Government Affairs December 1, 2017 WEEKLY UPDATE A Publication of the CGS Office of Public Policy and Government Affairs December 1, 2017 Inside the December 1st Issue: ➢ Advocacy Opportunity ➢ Congressional Update ➢ Department of Education News ➢ National Science Foundation News ➢ Reports and Studies ➢ CGS Update ➢ Miscellaneous ➢ Quips and Quotes ➢ Website Resources Weekly Update will not be published next week during the CGS Annual Meeting. The newsletter will return on December 15. Advocacy Opportunity Congress continues its work on a tax bill. Once both chambers pass their different versions of the bill (see below), a conference to resolve the differences will be convened in the next few weeks. The conference provides an additional opportunity to advocate for changes. Connect with your government relations representative to make sure graduate education is part of their message. Use the resources and action items available on the CGS Tax Resources page, including a link to the Tax Reform and Higher Education website and the CGS Public Policy and Advocacy page. Congressional Update Tax Bill in the Senate The Senate continues to debate its tax bill, with a vote on final passage expected soon. Unlike the House version, the Senate bill does not eliminate IRC Section 221, the deduction of interest paid on student loans; IRC Section 117(d)(5), deduction of qualified tuition reductions, such as waivers and/or remissions; IRC Section 127, deduction of employer-provided education assistance; and the Lifetime Learning Credit (LLC). It also makes no changes to current law with respect to the American Opportunity Tax Credit (AOTC). An amendment offered by Senator James Lankford (R-OK) would allow non- itemizing taxpayers to deduct charitable donations up to one-third of the standard deduction threshold. There is concern that the House bill, by doubling the standard deduction, would discourage taxpayers from itemizing and reduce the amount of charitable giving, which could have significant implications for institutions of higher education. CGS signed onto a community letter in support of the amendment. The House is expected to vote on Monday to go to conference with the Senate on the tax legislation. The Congressional Budget Office (CBO) estimated that the Senate tax bill gives substantial tax cuts and benefits to individuals earning more than $100,000 a year, while those who are middle and lower-income would be worse off, with most people earning less than $75,000 a year seeing a tax increase by 2027. CBO also reported that the Alexander-Murray proposal to stabilize the insurance markets would not mitigate the projected impact of repealing the Affordable Care Act’s (ACA) individual mandate. The Joint Committee on Taxation also reported that, even with projections of economic growth, the Senate bill would add $1 trillion to the deficit over the next decade. Additionally, because the Senate tax plan adds to the deficit, under budget rules it could trigger $150 billion in mandatory spending cuts every year for the next 10 years, which would include cuts to higher education, student loans, and research programs. Congress has typically waived these rules in the past, however that requires 60 votes in the Senate. Congress Faces a List of Pass-Mass Items Before the End of the Year In addition to completing work on tax reform, there are several items that Congress must address, including raising the budget caps, passing a FY 2018 spending package, a legislative fix for the Deferred Action for Childhood Arrivals (DACA) program, the Alexander-Murray bill to stabilize the private health insurance market, reauthorization of the Children's Health Insurance Program (CHIP), and an additional hurricane-relief package. Congress has until the spring to raise the debt ceiling. Congressional leadership indicated that Congress will vote on a short-term continuing resolution next week, which will fund the government through December 22, while negotiations continue on a long-term spending package. Last week, the Senate Appropriations Committee released drafts of its final FY 2018 spending bills: • The Interior and Environment Appropriations bill provides a total of $32.6 billion, $250 million below the FY 2017 enacted level, and $4.8 billion above the president’s budget request. The Interior Department would receive $12.17 billion. The Environmental Protection Agency (EPA) is funded at $7.9 billion, a reduction of $ 149.5 million from the FY 2017 level, and $2.3 billion above the administration’s request. This includes $634 million for science and technology programs and initiatives. The bill also provides $149 million for each of the National Endowments for the Arts and Humanities, which is equal to FY 2017 levels. • The Defense Appropriations bill funds the Department of Defense at $581.3 billion, $15.4 billion above the President’s budget request. It provides $2.3 billion, $30 million above the President’s request, for basic research. • The Homeland Security Appropriations bill recommends $51.6 billion, $770 million above the budget request. $720 million are appropriated to support science and technology, which is $93 million above the President’s request. The bill also provides $1.6 billion for a southern border wall. • The Financial Services bill would transfer the Consumer Financial Protection Bureau’s (CFPB) accounts from the mandatory to the discretionary side. None of the bills are expected to receive a markup prior to being pulled together into a single omnibus package. Additionally, earlier this month, the White House sent a request to Congress for $44 billion in relief aid for Texas, Puerto Rico, the U.S. Virgin Islands and Florida, which are still recovering from the hurricanes that occurred this summer. To cover a portion of the funds, the plan would pull $3.9 billion from the Pell grant surplus and make cuts to conservation and research programs at the Department of Agriculture (USDA). Congress Begins the HEA Reauthorization Process The House Committee on Education and the Workforce released its proposal to reauthorize the Higher Education Act. The Promoting Real Opportunity, Success and Prosperity Through Education Reform (PROSPER) Act would make significant changes to student loan programs by placing cap on the amount graduate students can borrow to cover tuition and living expenses, eliminating loan origination fees, ending the Public Student Loan Forgiveness (PSLF) program, and altering the income-based repayment (IBR) program. The changes to PSLF and IBR will only impact new borrowers, while maintaining the status quo for current borrowers. The legislation would also simplify the Free Application for Federal Student Aid (FAFSA), nearly double federal funding for work study programs, repeal gainful employment regulations, and maintain the ban on the student unit record. It would also require recipients of federal student loans to undergo annual financial aid counseling tailored to a borrower’s individual situation. The committee could markup the bill as early as next week. On Tuesday, the Senate Health, Education, Labor, and Pensions (HELP) Committee held its first hearing in this Congress on HEA reauthorization. The focus of the hearing was the simplification of the FAFSA. Although most agree that simplification of the form is necessary, there are concerns about whether colleges and states will have enough information to evaluate students to determine eligibility for institutional and state aid. Witnesses discussed how the FAFSA has become a barrier to access, particularly for low-income, first generation students, and highlighted several fixes that can be made including linking various databases across the federal government that already contain applicants’ financial information. The impact of the tax bill on students was also part of the discussion. Chairman Lamar Alexander (R-TN) indicated that the committee will hold an HEA markup early next year. Additionally, Rep.’s David Price (D-NC) and Susan Davis (D-CA) have introduced legislation to reauthorize Title VI of the HEA, which supports foreign language and international education programs. The bill would fund Title VI programs at $125 million in FY18; extend authorization; modernize, and streamline a variety of existing programs; and codify existing grant processes that prioritize qualified minority-serving institutions. Bill Would Simplify Income-Driven Repayment Congressman Drew Ferguson (R-GA) has introduced a bill (H.R. 4372) to consolidate income-driven repayment plans, using a borrower's discretionary income to calculate their monthly student loan payment and collapse all existing income-driven repayment plans into one. The bill would also retain a 10-year standard repayment plan, with interest accrual ending after 10 years, but there would be no time-based loan forgiveness. Higher Ed Transparency Bill Reintroduced Senator Ron Wyden (D-OR) reintroduced the Student Right to Know Before You Go Act. The updated bill would require institutions to provide information to prospective students such as graduation rates and debt levels, and require privacy- protecting technology designed to protect the sensitive information that goes into calculating the data. Lawmakers Seek DACA Fix Last week, a group of female Democratic senators led by Senator Catherine Cortez Masto (D-NV) sent a letter to Senate Majority Leader Mitch McConnell (R-KY) asking him to have a vote on the Dream Act by the end of the year. Additionally, this week, more than two dozen House Republicans have signed onto a letter urging Speaker Paul
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