President Signs HEA Overhaul into Law

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Publication date: 
14 August 2008

On July 31, Congress sent The Higher Education Opportunity Act (H.R. 4137) to the President’s desk.   Ten years after the last Higher Education Act (HEA) reauthorization, five years after legislators sat down to write another reauthorization, and after eight temporary extensions this year, the President has signed the overhaul into law.  Some highlights of the 400-plus page law include:


 -Websites organized by the Department of Education (ED) that will list all institutions of higher learning in the U.S. with data on tuition costs, recent price increases, graduation rates, and popular majors.

-A web-based calculator to be developed by ED that will allow students to estimate college costs based on income and other inputs.  This calculator will be adaptable to individual institutions, which will be required to post this calculator (or their own) on their websites.

 -By 2010 ED must publish lists of the top 5% most expensive institutions, 10% least expensive, and 5% that have had the largest percentage increase over the last three years.  Institutions that fall into the last category must justify their tuition and fee increases in writing to the Secretary of Education.


 -States must maintain their previous five-year average for higher education spending or risk forfeiting College Access Challenge Grant funds.

 -The Free Application for Federal Student Aid (FAFSA) form has been simplified through language changes and a new two-page format.

 -The maximum annual Pell grant award is increased to $8,000 by 2014.

 -All co-branding, gifts, and revenue sharing arrangements between lenders and schools are banned.

 -Borrowers will have three days to void any loan agreements.



 -Publishers must offer “bundled” textbooks separately, and separate their costs.  Bundled textbooks are often sold for lab courses.

 -Institutions must develop plans to prevent the unauthorized distribution of copyrighted material through technology-based deterrents. This provision would seem to be in response to the proliferation of peer-to-peer sharing networks.



 -ED will contract with a marketing firm to create a campaign to encourage underrepresented minorities to pursue careers in STEM fields.

 -ED must create a National Database on Financial Assistance for the Study of Science, Technology, Engineering, and Mathematics (STEM Database) with information on scholarships, fellowships, and private financial assistance programs.


-Graduates who pursue careers in areas of “national need” including education and STEM careers can receive up to $10,000 in loan forgiveness.