DC Shuttle: Loan Deal Reached, NCLB Weakened, E-Rate Boosted

Student loan deal reached. A bipartisan group of senators announced a compromise on the Stafford Loan interest rates. Senator Tom Harkin, chair of the Health, Education, Labor and Pensions committee and Sens. Tom Carper (D-DE) Tom Coburn (R-OK), Joe Manchin (D-WV) and Angus King (I-ME) also participated in the announcement at the Capitol. According to reports, the White House also backs the measure. Majority Leader Harry Reid (D-NV) vowed “quick” action on the bill, which is expected to be voted on in the next week. The bipartisan proposal would tie interest rates on undergraduate subsidized and unsubsidized Stafford loans to the 10-year Treasury note plus 2.05 percentage points for undergraduates, and plus 3.6 percentage points for graduate loans. This translates into an interest rate of approximately 3.86% for undergraduate students for the coming year, higher than the 3.4% rate that lapsed on July 1, but certainly more manageable than the current 6.8% rate. Graduate students would have access to loans at 5.4%, and parents would be able to borrow at 6.4%. The interest rates would apply retroactively to loans taken out since July 1, 2013. The compromise does include caps on interest rates for these loans—8.25% for undergraduate students, 9.5% for graduate students and 10.5% for PLUS loans for parents. The compromise proposal also calls for a broader government study of college costs, at the request of Chair Harkin. Harkin did suggest the rates could be revisited as Congress begins to address the reauthorization of the Higher Education Act, saying the results of the proposed study on college costs would provide important context.

House ESEA reauthorization. The House passed the Student Success Act (H.R. 5) by a 221 to 207 vote, with no Democrats voting in support. The bill, a departure from the policies of No Child Left Behind, would reduce the federal role in public education and cede back to states decisions about how to deal with failing schools, how and whether to evaluate teachers, and how to spend much of the money sent by Washington to educate poor, disabled and non-English-speaking students. The bill would eliminate the current accountability system, called adequate yearly progress, and would allow states to develop their own academic standards in reading, math and science, and leave to their discretion whether to set standards for other subjects. The bill also would allow states to identify their poorest-performing schools and let local districts develop their own strategies for improving them. The bill consolidates multiple programs into a Local Academic Flexible Grant, which would allow states and school districts to support their own priorities. The proposal would prohibit the education secretary from pushing for states to adopt the “Common Core” standards. The House adopted by voice vote an amendment that would delay implementation of the bill’s new Title II funding formula until the Education Department determines that the formula would not reduce funding for schools serving high percentages of students in poverty. It also adopted, by voice vote, an amendment stating that if there is not enough funding to award grants to run an effective direct student services program, states would be required to prioritize awards to local educational agencies with the greatest number of neglected, delinquent or migrant students, English learners, at-risk students and Native Americans. The White House on Wednesday issued a veto threat against the bill. In the Senate, the Health, Education, Labor and Pensions Committee approved its own reauthorization bill (S. 1094) on June 12.

E-Rate. The Senate Commerce, Science and Transportation Committee held a hearing on broadband in schools and libraries. The Federal Communication Commission (FCC) E-Rate program has worked since 1996 to connect schools and libraries to the Internet at speeds of at least 100 megabits per second. Newly elected Senator Edward Markey (D-MA) was named to the Commerce, Science and Transportation Committee, and expressed support for the program and emphasized the need for expanding and evolving its use. The FCC is scheduled to address the issue at its next public meeting on July 19.

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council’s Weekly Washington Report Higher Education Update, of July 22, 2013.

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.


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