Financial Intel Monthly

Higher Education Opportunity Act

Aug 2, 2020 9:56:00 AM / by The Retirement Group (800) 900-5867

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The Higher Education Opportunity Act (the Act) was signed into law on August 14, 2008. The Act reauthorizes the Higher Education Act of 1965 for another six years, and includes many other provisions designed to improve college affordability, access, and accountability. Provisions of the Act are effective August 14, 2008, unless otherwise noted. Highlights of the Act are discussed below.

New Comprehensive Website for College Costs

To make college costs more transparent and to facilitate better cost comparisons, the Act directs the Department of Education beginning July 1, 2011, to publish national lists for each of nine institutional categories naming the top five percent of colleges with: (1) the highest tuition and fees; (2) the highest "net price" (cost of attendance minus the average aid provided per student); (3) The largest percentage increase in tuition and fees; and (4) the largest percentage increase in net price. (Colleges with the largest percentage increases in either tuition or fees or in net price will be required to submit a report to the Department of Education providing the reasons for the increase and the steps that will be taken to reduce costs.) In addition, the Department of Education will publish annually state-by-state information concerning trends in state higher education spending, as well as tuition, fees, and financial aid for students at state institutions.

The Act also directs the creation of a new "net price calculator" in 2009, a tool that is intended to provide students and their families with a more individualized estimate of the net price at particular higher education institutions. Other calculators, including a "multi-year calculator," which is intended to help students and their families estimate the amount they must pay to attend particular institutions in future years, will also be developed.

Simpler Financial Aid Application

In an effort to make the federal government's financial aid application, the FAFSA, less complex and to encourage more families to apply for aid, the Act directs the Department of Education to streamline the FAFSA over the next five years by reducing the number of questions (currently there are over 100 questions). To further reduce the amount of information an applicant has to enter on the FAFSA, the Act encourages the Department of Education and the IRS to work together to use information from an applicant's federal tax form, such as asset and income information. The Act also creates a new two-page FAFSA-EZ form for low-income students, and simplifies the FAFSA reapplication process.

Expanded Federal Pell Grant, Work Study, Grace Period For

GradPLUS Loans, And Scholarship Program

The Act expands several federal financial aid programs. First, the Act increases the maximum Pell Grant from $5,800 to $9,000 per academic year by 2014, and for the first time, makes Pell Grants available year-round, not just for the fall and spring semesters.

Second, the Act expands the community service opportunities available under the federal work-study program, a federal program that subsidizes jobs for undergraduate and graduate students who demonstrate financial need.

Third, the Act creates a six-month grace period for repayment of all graduate student PLUS loans (called GradPLUS loans) disbursed after July 1, 2008. Under prior law, borrowers under the GradPLUS program had to begin repaying their loans as soon as they were no longer enrolled at least part-time. With the new six-month grace period, the Act gives GradPLUS borrowers the same benefit as other student loan borrowers. (However, during the grace period, interest on the loan continues to accrue and is capitalized.) Fourth, the Act reauthorizes the Robert C. Byrd Honors Scholarship Program for fiscal years 2008 through 2013. Additionally, eligibility for the scholarships is extended to home-schooled students.

Reduced Textbook Costs

To address the rising cost of textbooks, the Act requires textbook publishers effective July 1, 2010, to disclose the retail cost of textbooks and supplemental materials before selling them to school officials. This provision is intended to make it easier for faculty, students, and parents to decide whether a particular textbook is worth the cost. The Act also discourages the practice of "bundling," in which publishers package books with often expensive supplementary materials like workbooks, DVDs, or CDs. Publishers will be required to sell unbundled versions of every bundled textbook they sell, allowing students to purchase only the exact items they need.

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Increased Aid for Military Families

The Act creates a new scholarship program for active duty military personnel and their family members, including spouses and children of active duty military servicemembers or veterans. The Act also allows the child of a member of the Armed Forces who died in Iraq or Afghanistan after September 11, 2001, to receive the maximum Pell Grant. The Act also establishes support centers to help veterans succeed in college and graduate school, and ensures fairness in student aid and housing to make it possible for veterans to attend college while also fulfilling their military service duties.

Improved Student Loan Literacy

The Act includes many provisions intended to promote student loan literacy and to provide students and their families with full and fair information about their different loan options. The Act requires lenders offering private loans to inform students of their federal borrowing options, and prohibits private loan lenders from charging fees to students who want to pay off their loans early. Private lenders must also fully disclose the terms and conditions of their loans in at least three different stages of the loan application process.

On the college side, the Act requires institutions to fully disclose all relationships with lenders, and bans all gifts and revenue sharing agreements between schools and lenders offering federal or private loans. The Act also requires that all student loan exit counseling be done with the school's involvement, and requires all students to be informed of all possible loan repayment options.

Expanded Loan Forgiveness

The Act authorizes up to $10,000 in student loan forgiveness for employees serving the public interest, including but not limited to public school teachers, nurses, public defenders, prosecutors, firefighters, military servicemembers, first responders, and law enforcement officers.

Expanded Programs for Minority and Disadvantaged Students

The Act increases direct aid to colleges that serve low-income and minority students. The Act also doubles the GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) funding from $200 million to $400 million and broadens the program through the first year of college. Students will be offered mentoring and financial literacy opportunities, and there will be more emphasis placed on ensuring the academic success of foster, homeless, and other disadvantaged youths.

Increased Opportunities for Disabled Students

In an effort to ensure college opportunities for students with disabilities, the Act establishes a national center that will provide support services and other information to colleges, and to students with disabilities and their families. The Act also helps colleges recruit students with disabilities and improves education materials and facilities.

Campus Initiatives

To help save on energy costs, the Act encourages colleges to adopt sustainable and energy-efficient practices. Toward that goal, the Act creates a grant program to help colleges design and implement such practices, and, for the first time, convenes a higher education summit that will examine ways to implement energy-efficient practices on the nation's college campuses.

The Act also targets college disaster plans by including provisions intended to help all colleges develop and implement state-of-the-art emergency systems and campus safety plans. The Act requires the Department of Education to develop and maintain a disaster plan in preparation for emergencies, and establishes a National Center for Campus Safety at the Department of Justice. The Act also requires colleges to "immediately notify" their students and employees when an emergency, such as an active shooter situation, happens on campus.



This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.


The Retirement Group is not affiliated with nor endorsed by,,,,, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.


The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at


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