DC Shuttle …
Obama gives executive order on student loan repayment. The Obama Administration announced that it would take executive action to allow borrowers of older student loans to cap their repayment at 10% of income. Five million borrowers with student loan debt would be eligible to cap their student loan repayments under the proposed regulation. Under the executive order, the U.S. Education Department will begin work on regulations to expand a 2010 law (PL 111-152) allowing student loan borrowers to cap loan payments at 10% of their income, with the balance forgiven after 20 years of repayments.
Senate does not pass Student Loan Refinancing bill. The Senate failed to pass legislation (S. 2292) that would have allowed student loan borrowers with only student loans to refinance their loans to current, lower rates. The bill was introduced by Sen. Elizabeth Warren (D-MA) and has become a centerpiece of the Democratic agenda. The Senate voted 56 to 38, failing to get a two thirds majority for cloture on the bill. The legislation is part of the Democrats’ agenda approaching the midterm elections, and they hoped that their approach would gain the approval of young voters. Under the legislation, the cost was offset by imposing higher taxes on individuals making over a million dollars a year. The Congressional Budget Office (CBO) estimated that about half of all outstanding federal loans, which amount to $460 billion, and private loans, at $60 billion, would be refinanced under the bill. Spending on student loans would increase by more than $55 billion in FY 2015, and total deficits would rise for the first few years after enactment, when most students would apply for refinancing, according to the estimate. Deficits would then decline by $22 billion from FY 2015 to 2024, CBO said.
We publish the DC Shuttle each week featuring higher ed news from Washington collected by the New England Council, of which NEBHE is a member. This edition is drawn from the Higher Education Update in the Council’s Weekly Washington Report of June 16, 2014.
Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council’s mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.