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Federal Relations Report | May 2008Introduction In some ways, the mood in Congress in this election year parallels what you’d find in any elementary or secondary school classroom during the last days of the school year. At a certain point, even the most diligent student will find herself zoning out, looking out the window, or daydreaming about what comes next: outdoor fun, later morning wake ups, or what have you. Similarly, our elected officials are finding their legislative focus drifting. Many of them want to move onto what’s next, which is getting back to their districts to run for re-election. For the Democratic leadership of the Congress, the focus of daydreams is a little further out: the possibility of a new, Democratic administration, a stronger majority to pass legislation, or both. It’s inexorable rather than cynical, then, that lawmakers moving major bills are asking themselves, “Can I get a better deal next year, after the election?” Consequently, speculation is rife that the FY 2009 budget process will stall out and Congress will fund the federal government with a continuing resolution until a new administration takes office in January, at which point the FY 2009 budget could be revisited. Working against the inertia of “wait until next year” are the war that needs funding, the current unsettled economy, and the possibility of being labeled a “do nothing” Congress. To provide for the war and to provide some more benefits to unemployed workers, Congress is crafting an FY 2008 emergency war supplemental funding bill. Recently, lawmakers also moved with unusual speed to preempt potential problems in the student loan markets. Also, a stalemate between Congress and the administration over reauthorization of the No Child Left Behind Act means that lawmakers anxious for significant educational accomplishments will keep pushing for reauthorization of the Higher Education Act. Budget: supplemental comes first Work on the FY 2008 emergency war supplemental funding bill has temporarily displaced work on the FY 2009 budget. Over the past several months, President Bruininks and many others, including the leaders of the Big 10 universities, have weighed in to support increased funds for research in the supplemental bill. The supplemental funding bill that has passed the Senate would
provide $400 million for the National Institutes of Health (NIH);
$200 million for NASA for return-to-flight activities; $200 million
for the National Science Foundation (NSF), with $150 million for
research and $50 million for education; and $100 million for science
at the Department of Energy, with $55 million for Fusion Energy
Sciences and $45 million for High Energy Physics. The remaining
$300 million would support environmental remediation through the
Department of Energy. The bill, as amended by the Senate, is expected to go back to
the House for its consideration in early June. At the beginning of May, Senator Kent Conrad (D-ND), the chair of the Senate Budget Committee, announced that the next step of the budget process FY 2009, reconciling the House and Senate budget resolutions, which are currently $1.8 billion apart, would be delayed until after Memorial Day. Whether that was the first bolt falling off the wheels of the budget process or just a temporary delay remains to be seen. As mentioned in the introduction, the prospects for a six-month continuing resolution to fund the government beginning October 1 are eclipsing the regular budget process for FY 2009. A continuing resolution has unhealthy implications for the University because the resolution is likely to lead to reduced grants and delay of future awards from federal science and research agencies. Our office is collecting information about the potential impact of a continuing resolution on university researchers to share with federal officials. If you have estimates of or anecdotes about what flat funding for science agencies for FY 2009 might mean for you, your college or department, please send them to Dan Gilchrist at dang@umn.edu. Student lending: de-crunching credit Today, students at the University of Minnesota will largely go unaffected by tightening credit in the student loan market, but they will reap some benefits from a law designed to head off student lending troubles, a law that flew through Congress this spring. The University is a Direct Loan (DL) school, meaning that its students borrow money directly from the federal government. As of now, University officials believe that its students, with very few exceptions, will not have a problem obtaining the loans they need for the 2008-09 academic year. Around 80 percent of federally subsidized loans across the country are financed through the other federal program, the Federal Family Education Loan Program (FFELP), and it is the cloudy prospects for FFELP that have lead to congressional action. In recent months, dozens of banks and other financial institutions have announced that they are no longer going to offer student loans through FFELP. Outside observers attribute this exodus to a combination of the overall lending credit crunch, due to turmoil in the home mortgage sector, and decreased federal subsidies to these lenders passed by Congress last year. The majority of lawmakers who supported the shift of billions of dollars from FFELP subsidies to the Pell Grant program were particularly keen to avert a meltdown in the student loan market that might, fairly or unfairly, be laid at their feet. H.R. 5715, the bill Congress passed and the President signed last week, had these key provisions: • Increasing by $2,000 the annual loan limit for unsubsidized Stafford loans for undergraduates. (Students take out Stafford loans through both the FFELP and DL programs.) The new limits for dependent students are $5,500 for freshmen, $6,500 for sophomores, and $7,500 for juniors and seniors. Independent students or those whose parents don't qualify for a government PLUS loan have limits of up to $6,000 in each of the first and second years, and $7,000 in the third and fourth years. Total loan limits for Stafford loans over the course of a student’s education are also going up. These increased limits may help students at the University avoid taking out private student loans, which are usually more expensive and less flexible than the loans offered through the Stafford program. • Temporarily loosening credit requirements for parents seeking loans under the PLUS loan program. Parents will also get more time to repay Plus loans, if they wish. • Restoring liquidity to FFELP by updating procedures for lender-of-last-resort loans and allowing guarantee agencies to act as lender of last resort on an institution-wide basis. The bill also authorizes the secretary of education to purchase loans from private lenders previously made under FFELP, provided that those purchases do not result in any cost to the federal government. • Expanding eligibility for the Academic Competitiveness Grant (ACG) and SMART Grant programs. An estimated $430 million in new revenues over five years from increased borrowing under the parent PLUS program would be used to expand eligibility for the ACG and SMART grant programs. On May 20 both chambers passed another extension of the Higher Education Act (HEA), which would extend the act through June 30. Congress had originally hoped to complete the reauthorization process before the Memorial Day recess. However, partly due to the illness of Sen. Edward Kennedy (D-MA), it is now expected that work on the legislation will continue when Congress reconvenes in June with hopes of finishing the bill by the end of the month. Working against passage of the reauthorization this year is the looming election and Congress’s already completed actions on increasing Pell grants and shoring up the student loan industry, areas that might otherwise have needed addressing in the HEA bill. Draft language for reauthorization of the Higher Education Act has left the higher education community struggling for good things to say about the as-yet-unfinished bill. Last week, elements of a House-Senate compromise on the Higher Education Act began to trickle out from the offices of education committee leaders. Within the proposed language, the creation of year-round Pell grants is the clearest step forward, as is a provision to extend ACG/SMART grants to anyone who is Pell eligible, but the positive proposals drop off precipitously from there. At best, the bill offers good news-bad news dichotomies in areas of concern to the University of Minnesota. A good example is accreditation, where the higher education community and accrediting agencies jointly submitted compromise language that would limit the authority of the Education Department to regulate the accreditation process. The compromise bill explicitly prohibits the secretary from issuing standards for accrediting agencies to follow in several areas, including student achievement, curricula, recruiting and admissions, and measures of program length. However, the language is silent in other areas, including issues related to faculty and facilities. This has the potential to allow an assertive secretary to set standards in these non-enumerated areas. Under the bill, accrediting agencies are also charged with ensuring that colleges and universities comply with congressionally mandated reports, an entirely new function for these specialized agencies. Another good news-bad news area is peer-to-peer networking, where the draft language is a significant improvement over the House-passed version, eliminating a requirement that campuses prepare a plan for offering alternatives to illegal downloading, and a plan to explore technology-based deterrents. At the same time, the draft includes new language that would require institutions to disclose “the development of plans to detect and prevent unauthorized distribution of copyrighted material on the institution's information technology system, which shall, to the extent practicable, include offering alternatives to illegal downloading . . .” Students at the University of Minnesota and elsewhere have consistently rejected alternative services as having inadequate offerings and inconsistent quality, and lacking portability. (See here for an update on stepped up industry actions targeting college networks and students.) The draft bill proposes to impose a host of new mandatory reporting and disclosure of information and data by colleges and universities. Much of the data, such as information on alumni of institutions and disaggregated information on graduation rates and percentage of students who are eligible for Pell Grants (not Pell Grant recipients) at an institution, is not currently collected by any data source, let alone federal data sources. Senator Lamar Alexander (R-TN) has indicated that he intends to take on some of these additional mandatory reporting requirements through an amendment that would allow institutions participating in voluntary accountability measures to waive some of the proposed mandatory reports. Instead of choosing between the Senate and House versions, the
conference bill appears to opt for “all of the above,” especially
regarding college cost reporting. The bill would require institutions
in the top 5 percent of their sector with regard to increases in
tuition and fees or “net price” over three years to submit additional
reports to the secretary. The reports must include a description
of steps that such institutions have taken to reduce cost. (In
a different part of the conference report, three quarters of public
institutions in each sector would be required to submit additional
reports to the secretary, including the “actions being taken by
the institution to reduce net tuition.”) • “Truth in tuition” proposal. The bill would require institutions to publish nonbinding estimates of future tuition and fee charges. • The “30-minute” rule. The bill contains House language that would require institutions to have in place campus policies that would notify the campus community within 30 minutes of an emergency situation, a highly problematic proposal for emergency response professionals. (This issue is very much in flux.) • Implementation date. The draft bill sets multiple effective dates for various provisions. However, the vast number of proposed new requirements and changes in law would greatly complicate implementation of the bill for institutions and the Department of Education. Controversial issues such as advanced information on textbooks, the definition of “net price” (i.e., will it include room and board, transportation, etc.), and a requirement for states to maintain their support for higher education have yet to be resolved and remain as bracketed items in the draft reports circulated thus far. Farm bill: from unpassable to unstoppable Regardless of who takes the White House next year, reauthorization of the farm bill (H.R. 2419) would have remained controversial. That may be why House Agriculture Committee Chair Collin Peterson (D-MN) was relentless in pushing for reauthorization of the five-year authorization bill this year. At several points, Rep. Peterson threatened to let the current, extended farm bill lapse to keep negotiations on track, which would have caused the government to revert to the antiquated “permanent law” farm policies adopted in 1949. On May 14, a compromise farm bill passed the House by 318-106 and the Senate by 81-15. The President vetoed the bill a week later and was quickly overridden in both houses. A strange coda occurred, however, when it was revealed that, due to a clerical error, the bill sent to the president was missing an entire title dealing with trade. Senate leadership opted to deal with the mistake sometime in the future, but the House repassed the entire bill. On the research side, the land-grant community reaped a mixed harvest. An ambitious, NIH-style “doubling” of research funds available was not realized, although a number of recommendations coming out of the NASULGC’s CREATE-21 proposal were adopted. The bill mandates $500 million in new competitively awarded research spending over five years for projects on organic crops, specialty crops, new farmers, and biofuels. An additional $190 million annually in discretionary spending for those four areas is also authorized, but those funds must be appropriated each year through the regular budget process. That pot of money is now organized under a new National Institute for Food Agriculture (NIFA), which will assume the work of the former Cooperative State Research, Education, and Extension Service (CSREES). In authorizing the new NIFA funds, the conferees did not agree to resume mandatory funding for the Initiative for Future Agriculture and Food Systems (IFAFS) program, which was scheduled to have mandatory funding of $600 million resume in 2010. The agency's flagship competitive grants program, currently called the National Research Initiative, will be renamed the Agriculture and Food Research Initiative (AFRI). Funding for AFRI will be authorized at $700 million per year, with 60 percent of appropriated funds going to basic research and the remaining 40 percent to applied research programs. Within the total funding for AFRI, at least 30 percent must be for integrated projects (those that integrate research with extension or teaching), thereby providing a newly elevated role for extension and education within AFRI. The conference report also contained these further items: • A strengthened undersecretary’s office responsible for overseeing research, extension, and education • Mandated creation of an annual “road map” to guide all of USDA’s science offices • New budget development guidelines, in which a single budget line item will reflect research, education, and extension activities for that and the preceding five years, and in which critical base funding levels (based on FY 2006 levels) are established • Increased cap on indirect costs for competitive grants, going from 19 percent to 22 percent On The Hill In late April, Congresswoman Betty McCollum served as the keynote speaker for a 'town meeting' on innovative approaches to the worldwide AIDS epidemic held at the Mayo Memorial Auditorium. The Congresswoman serves as co-chair of the Congressional Global Health Caucus. Dr. Nikos Papanikolopoulos visited members of the Minnesota delegation regarding distributed robotics, and the earmark request the University submitted to continute to fund that research. Extension educators and administrators were in DC for the Public Issues Leadership Development conference. One of the big objectives of this conference was to learn about connecting the Capitol and the Community (building relationships, telling our story, etc.). Another objective was learning how to communicate with public decision makers. One whole day of the conference was set aside to spend "on the Hill" with members of congress and staff. The University brought approximately 15 people to the convention. University of Minnesota, Morris Chancellor Jacquie Johnson was one of three university leaders nationwide to testify before the U.S. Senate Committee on Environment and Public Works in Washington, D.C. U.S. Senator Amy Klobuchar, who is a member of this committee, invited Johnson to testify on Thursday, April 3, during the Senate committee hearing on “Examining Strategies to Reduce Greenhouse Gas Emissions at U.S. Colleges and Universities.” Klobuchar visited Morris in January to tour facilities at UMM, the West Central Research and Outreach Center and the USDA Soils Lab. Chancellor Johnson’s remarks highlighted UMM’s efforts to eliminate the campus’ carbon footprint by 2010. Her testimony drew from the intellectual energies of UMM’s students, faculty and staff in telling the story at the national level and articulating the achievement of national distinction for a rigorous public liberal arts mission. Dr. Yongwei Zhang and Yuedong Zhou, Director and Training Program Director, respectively, of the University of Minnesota China Center were in Washington for a well-attended Alumni Association reception at the Chinese Embassy on May 6. The Washington, DC, chapter of the Alumni Association also hosted Rep. Keith Ellison at a Capitol Hill reception on March 31. On Campus Andy Burmeister, from Senator Coleman's office visited campus and met with Professor Nikos Papanikolopoulos regarding an earmark that was submitted to the Senator's office. Mr. Burmeister also visited Graham Candler and the National Hypersonics Research Center. Click here for past updates.
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