Student Loan Interest Rates
A bipartisan group of senators, led Majority Whip Dick Durbin (D-IL), announced another agreement on student loan interest rates last week. The deal, which represents a new scheme that shifts to market-driven variable interest rates, was announced after Sen. Tom Harkin (D-IA) ultimately agreed to support it. According to reports, the latest proposal would peg interest rates to the 10-year Treasury note. For both the subsidized and unsubsidized undergraduate loans, the proposed measure would add 2.05 percent and cap interest rates at 8.5 percent. For graduate loans, the proposal would add 3.6 percent and cap interest rates at 9.5 percent, while PLUS loans would be given a 4.6 percent plus up and a 10.5 percent cap. Additionally, the Congressional Budget Office scored the proposal as providing a savings of $715 million over 10 years, which should help garner other Republican support, particularly in the House. Both Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH) have indicated that they support the proposal, which means votes on the measure will likely occur this week, even as early as Tuesday, July 23. There may be votes on alternatives that seem certain to fail (again), as Senate Democratic leaders have not yet indicated that they have support from a majority of their caucus. Several Democratic lawmakers not entirely happy with the agreement have noted they intend to re-examine the issue again as part of the reauthorization process for the Higher Education Act this fall.
Elementary and Secondary Education Act (ESEA) Reauthorization
On July 19, the House passed the Student Success Act (H.R. 5) by a vote of 221-207. There were no Democrats who voted for the bill, and 12 Republicans broke with the party to vote against the bill. Of the over 70 amendments filed, 26 amendments were considered and primarily addressed issues related to the role of the federal government in education, teacher standards, minorities and students with disabilities, and spending. One of the bill’s major themes was reducing federal mandates and granting states considerable flexibility in making educational decisions. Democrats, however, criticized the bill for failing to include guaranteed standards and eliminating the Average Yearly Progress accountability system without replacing it. The White House also issued a veto threat against H.R. 5 based on similar reasons voiced by House Democrats. In addition to the administration, there is a broad range of organizations who oppose the bill, including the National Education Association, the American Federation of Teachers, Education Trust, the National Council of La Raza, and the U.S. Chamber of Commerce. On July 18, the Chamber sent out a key vote letter expressing concerns that the bill would not require states to adopt college- and career-ready standards and assessments. We do not expect any further movement on the Student Success Act unless the Senate is able to pass its version of the bill, which would likely initiate conferencing. In June, the Senate Health, Education, Labor and Pensions Committee approved its bill (S. 1094), which aligns more closely with House Democrats’ substitute amendment. While Senate leaders have informally slated floor debate on S. 1094 to occur this fall, that timeline is likely to slip.
Comments on Higher Education Act Reauthorization
The deadline to submit comments to the House Education and the Workforce Committee on the Higher Education Act reauthorization is August 2.
On July 18, the House Veterans Affairs Subcommittee on Economic Opportunity advanced a bill (H.R. 2327) that would establish a Veterans Economic Opportunity Administration in the Department of Veterans Affairs. The office would carry out education assistance, vocational, housing, and small-business programs. The committee also approved a bill (H.R. 2210) that would extend educational assistance under the Post-9/11 Educational Assistance Program to children of service members who pass away due to combat-related wounds after a medical discharge.
This Week’s Hearings:
- Tuesday, July 23: The Senate Homeland Security and Governmental Affairs Committee will hold a hearing titled, “Improving Educational Outcomes for our Military and Veterans.”
- Wednesday, July 24: The House Science, Space and Technology Subcommittee on Research and Technology will hold a hearing titled, “Technology Transfers at Research Institutes.”
- Wednesday, July 24: The House Education and the Workforce Committee will mark up the Supporting Academic Freedom through Regulatory Relief Act (H.R. 2637).