CTE Policy Watch: A blog for CTE advocates

Congress Passes Final Tax Bill

ACTE has previously reported on congressional efforts to pass a tax reform bill, first by covering a House proposal, then by recapping a Senate proposal, and finally by previewing the issues that a conference committee was tasked with reconciling between the two versions. Throughout the process, ACTE shared our concerns with lawmakers. On Wednesday, the House adopted a version of the bill that the Senate had passed hours earlier. The bill is now headed to the President Trump’s desk, and he has said that he intends to sign the measure.

Some of the provisions that ACTE originally identified as troublesome for the CTE community were not included in the final version. This includes the elimination of the deduction for educators’ classroom expenses, which was left untouched and will still allow an annual deduction of up to $250. However, two large items remain that could have a significant impact on the CTE ecosystem.

First, the bill caps deductions for state and local property and income or sales taxes at $10,000. Such a cap will put pressure on many states and localities to reduce their taxes, which in turn could decrease funding for public education, including CTE. In fact, estimates predict similar changes to deductions for state and local taxes could cost public schools hundreds of billions of dollars and put hundreds of thousands of education jobs at risk.

Additionally, the bill is estimated to cost up to $2.2 trillion over 10 years. Such a cost will likely compel funding cuts to other areas, including in non-defense discretionary spending, which includes education. Perkins funding has already been slashed by 13 percent over the past decade, without accounting for inflation. At a time when CTE funding has flatlined, ACTE opposed the tax bill which could further threaten funding.

If the president signs the bill before the New Year, the law would take effect on January 1, 2018.

House Committee Approves Higher Ed Bill

On Tuesday, December 12, the House Education and the Workforce Committee amended and approved on a party-line vote the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act (H.R. 4508). As we previously reported, this measure is the House Republican proposal to reauthorize federal higher education policy. There are a number of proposed changes to the existing higher education law that would impact postsecondary CTE, but ACTE is concerned that the bill does not adequately address issues of access and quality that are critical to ensuring all students are truly prepared for success in the 21st century economy. You can read our response to the PROSPER Act here.

The bill proposes a single definition for an institution of higher education that includes community colleges, postsecondary vocational institutions and area technical schools alongside four-year colleges and universities. However, the new definition also encompasses for-profit colleges—a change that would allow proprietary schools to access federal funds and programs that were previously unavailable to those institutions.

The PROSPER Act would allow students to use financial aid for programs under 600 clock hours in length, which is a step in the right direction toward providing greater access for students to short-term education and training. ACTE has endorsed the bipartisan Jumpstart Our Businesses by Supporting Students (JOBS) Act, which would expand Pell Grant eligibility to students enrolled in short-term education programs that lead to a recognized postsecondary credential and are least 150 clock hours of instruction time over a period of 8 weeks. The JOBS Act would also ensure that programs are providing real value to students through quality control provisions, such as those embedded in career pathways.

There are other potential changes to the federal student aid programs that merit further thought and refinement. It is unclear how the proposal to replace the existing institutional cohort default rate with a new measure that would tie financial aid program eligibility to student loan repayment rates would be operationalized by smaller CTE programs with very few student borrowers. Moreover, ACTE is concerned that the overall focus in the PROSPER Act on consolidating the existing financial aid programs into a “one grant, one loan, and one work-study” system will result in less funding for student aid, and fewer resources for student borrowers.

The most concerning piece of the PROSPER Act is the plan to eliminate programs supporting teacher education and development. To address the nationwide shortage of CTE teachers, ACTE has endorsed the bipartisan Technical Education and Career Help Act, which would permit partnerships between school districts and postsecondary institutions to access funding for the development of CTE teacher preparation programs. The PROSPER Act would eliminate all funding for teacher prep, as well as TEACH Grants and public service loan forgiveness programs that benefit educators.

During the markup hearing, the committee considered over 60 amendments to the PROSPER Act on issues like apprenticeships, free community college, competency-based education and student-level data systems. A full list of those amendments is available here.

Congress Extends Funding Through December 22

Just before the previous Continuing Resolution (CR) for FY 2018 funding would have expired on December 8, Congress cleared a two-week extension of government funding. Funds will continue to flow at current levels until December 22 in order to allow more time for an agreement on FY 2018 funding levels to be reached.

Congressional leaders hope they will be able to reach a deal by that date to raise both the defense and non-defense discretionary (NDD) funding cap levels – likely for FY 2018 and FY 2019, in order to allow final funding bills to be completed. Other issues that may be included in any year-end agreement on funding include emergency funding for disaster relief, how to deal with Dreamers and reauthorization of the Children’s Health Insurance Program. Even if a deal is reached, a third CR will likely be needed in order to provide time to actually write appropriations bills under the revised funding caps. If a deal is not reached, the possibility of a government shutdown still exists. Stay tuned for more information as the appropriations battle unfolds!

Tax Reform Moves to Conference Committee

Now that both the House and Senate have passed tax reform bills, Members of Congress from both chambers and both parties will go to conference to reconcile differences in the two bills. House Speaker Paul Ryan, House Minority Leader Nancy Pelosi, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Chuck Schumer have named the 29 conferees to the committee. ACTE and Advance CTE recently sent a letter to the conference committee outlining our organizations’ opposition and concerns related to several provisions in one or both of the bills. Now is a great time to weigh in with your Members of Congress about concerns. 

ACTE has previously reported on the House and Senate bills, but some details have since changed. Below are brief summaries of the bills’ provisions most relevant to CTE.

State and Local Tax (SALT) Deductions
Both the House and Senate bill eliminate state and local income and sales tax deductions. The bills also cap property tax deductions at $10,000. Eliminating some of the SALT deductions will put pressure on states and localities to lower their taxes. Since most education funding comes from state and local governments, a number of estimates have forecast large cuts to education funding as a result of changes to SALT deductions.

Educator Expenses Deduction
Educators can currently deduct up to $250 of out-of-pocket classroom expenses. The House bill eliminates the deduction entirely, while the Senate bill increases the maximum deduction to $500.

Student Loan Interest Tax Deductions
The House bill eliminates the tax deduction for student loan interest for low- and middle-class families and individuals. The Senate bill keeps the deduction.

Higher Education Tax Credit
The House bill eliminates the Lifetime Learning Credit (LCC) in favor of a modest change to the American Opportunity Tax Credit (AOTC). However, the change could harm students who choose to upskill for second or third careers and who have already used their AOTC, or who are working students and take more than five years to complete a program or degree. By contrast, the LCC has no time limit. The Senate bill does not change these programs.

Employer Education Assistance Programs
The House bill eliminates tax benefits for employer tuition reimbursement programs, which would increase the cost of upskilling the nation’s workforce. The Senate bill does not change this program.

529 College Savings Account Expansion
The House bill expands the use of 529 College Savings Accounts to cover expenses related to apprenticeships.

Overall Cost of Tax Reform
The bills are estimated to each cost roughly $1.5 trillion over 10 years. The unpaid spending in the bills would likely compel cuts to non-defense discretionary spending, including education and CTE, at a time when Perkins funding has declined by 13 percent over the past decade.

ACTE will continue to monitor and report on tax reform and its impact on CTE educators, students and funding. The bill that emerges from the conference committee will be sent back to each chamber for a final vote.

House Unveils Higher Education Reauthorization Bill

On Friday, the Republican members of the House Education and the Workforce Committee announced their long-awaited proposal to reauthorize the Higher Education Act (HEA). While we work to provide a detailed analysis of H.R. 4508, the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act in the coming day, here are some of the highlights from the bill:

• Consolidates financial aid into a “one grant, one loan, and one work-study system”
• Allows students to use Pell Grants for shorter-term education programs
• Authorizes a competitive grant to expand access to in-demand apprenticeship programs
• Requires accrediting agencies to have an employer representative
• Offers a $300 bonus to Pell Grant recipients who take 15 credits per academic session
• Simplifies the Free Application for Federal Student Aid (FAFSA)
• Creates a pathway to financial aid eligibility for competency-based education programs
• Reforms the Federal Work-Study program and eliminates the cap on private-sector employment

The education committee in the Senate has yet to unveil its proposal for higher education reauthorization, but committee chairman Sen. Lamar Alexander (R-TN) has indicated that it will be a priority in 2018. Follow our HEA coverage on the CTE Policy Watch Blog.

Note added 12/13:
**On Tuesday, December 12, the House Education and the Workforce Committee held a marathon markup of the legislation and approved it on a party-line vote. We'll have more coverage on the blog soon and in the next ACTE News.