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Breaking News: College Cost Reduction Act and Smucker Amendment Update

Breaking News: College Cost Reduction Act and Smucker Amendment Update



On Thursday, January 11, 2024, Chairwoman Foxx introduced H.R.6951, the College Cost Reduction Act, which is a bipartisan effort to fix the current student loan debt crisis. The legislation includes measures related to increased transparency, policies focused on access and affordability, and additionally provides accountability provisions focused on student success.

The accountability measures included in the College Cost Reduction Act are of particular importance to AACS members. Many of the accountability measures will repeal current regulations that are harmful to our membership, such as:

·    Gainful Employment and Financial Value Transparency: Repeals current regulations by the Secretary and eliminates authority for any future regulations.

·    90/10 Rule: Repeals current regulations and eliminates authority for any future regulations.

·    Financial Responsibility: Repeals current regulations and clarifies circumstances in which ED determines whether an institution is financially responsible; requires ED to undergo a new rulemaking process to update the financial responsibility ratios no later than 18 months after enactment.

·    Changes in Ownership: Includes the Change of Ownership and Conversion Improvement Act (Rep. Owens and Rep. Miller Meeks), which repeals current regulations and reforms the process to require IHEs to pay an administrative fee when submitting change of control and conversion applications; these fees will be used by ED and the IRS to hire staff and reduce the application processing time as well as conduct oversight.

·    Other Repeals: Repeals new regulations issued by ED related to closed school discharges, borrowers defense to repayment, pre-dispute arbitration, false certification, administrative capability, certification procedures, and ability to benefit, as well as guidance related to personal liability for owners of proprietary institutions. Prohibits any substantially similar regulation on these topics from being issued by ED.

The College Cost Reduction Act would also significantly revise the current accreditation system. It proposes to provide States with the authority to designate industry-specific accreditors, and additionally directs accreditors to focus on student achievement outcomes standards in its review of institutional and program quality.

Finally, we note that the College Cost Reduction Act includes certain accountability provisions. AACS is analyzing these proposals to determine the potential impact on our membership. One provision provides that institutions will be held financially responsible for when borrowers are unable to pay their student loans. The proposed language states that institutions “will be required to compensate the government annually for a portion of the unpaid interest and principal on the loans associated with their former students based on the total price the institution charges students for a program of study and the value-added earnings of students after they graduate or, in the case of students who do not graduate, the institution’s completion rate.”

We will provide an in-depth analysis of this legislation in the coming days. We will additionally provide membership with an update for how to support the College Cost Reduction Act in its next steps in the legislative process.

Bill Summary

Bill Text

Fact Sheet


The inclusion of the Smucker Amendment–which blocks the implementation of the 150% certification rule–in the final appropriations bill will likely be determined by negotiations during a formal conference committee between the House and Senate. The Smucker Amendment was included in the latest text of the Labor, HHS, and Education Appropriations Act that was approved by the House Appropriations Committee. The Senate’s Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act was marked up this past July and did not include a similar amendment. Following the passage of House and Senate appropriations bills, the next step in the appropriations process is to hold a formal conference committee between the House and Senate to negotiate compromised text. As part of this process, Members from each chamber will be appointed as conferees to negotiate a compromise text, which then has to be approved by both chambers. The conferees are chosen from the membership of the Appropriations Committees.

As a reminder, Representative Lloyd Smucker (R-PA) introduced an amendment to the House, Labor, Health and Human Services, and Education Appropriations Bill that “prohibits the Department from using funds to implement, administer, or enforce a provision of their October 31, 2023 final rule that would prohibit education and training programs from exceeding their state’s minimum hours requirements.” The Amendment was in response to the Department’s Non-GE Final Rule, which included a provision that eliminated the 150% certification rule for Title IV institutions.

AACS will advocate with selected conferees and advocate for the inclusion of the Smucker Amendment. It is worth noting that the final appropriations bills may not include policy riders, in which case the Smucker Amendment will not be included. We will continue to update membership with any developments.

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State Update – June 4

The first week of the June finds only 14 state legislatures actively meeting. Recent and upcoming legislative adjournments include Louisiana on June 3 and New York on June 6. 

Another four states – Arizona, Delaware, New Hampshire and Rhode Island – will be adjourning their respective 2024 legislative sessions at the end of the month.

Learn More >