Student loan interest rate bill sent to president. On Wednesday, the House approved the Bipartisan Student Loan Certainty Act (H.R. 1911) by a vote of 392 to 31. The Senate passed the legislation the previous week and the bill is headed to the president, who has endorsed the legislation, for approval. The bill would modify how interest rates on federal student loans are set, tying interest rates to market rates, with loan interest rates fixed for the period of the loan. The bill would apply to all loans, except Perkins loans, issued on or after July 1, 2013. Interest rates would be pegged to the 10-year Treasury note, plus 2.05% for subsidized and unsubsidized portions of undergraduate loans, 3.6% for graduate loans and 4.6% for PLUS loans. The maximum rate would be capped at 8.25% for undergraduate loans, 9.5% for graduate student loans, and 10.5% for PLUS loans. The bill calls for a broader government study of college costs, at the request of Education Committee Chair Tom Harkin (D-IA). Harkin has suggested 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. The Congressional Budget Office “scores” the proposal at about $700 million.
Workforce Investment Act approved by Senate panel. On Wednesday, the Senate Health, Education, Labor and Pensions Committee approved a renewal of the Workforce Investment Act (WIA), the federal law that governs workforce training, by a vote of 18 to 3. The bill (S. 1356) would overhaul a broad range of job-training programs at community colleges, which haven’t been updated in 15 years. The measure would reauthorize the 1998 Workforce Reinvestment Act which expired in 2003. Under the bill, states would submit a single plan detailing their workforce development and training efforts, and use a single set of performance indicators to evaluate program success. A 2011 Government Accountability Office (GAO) report found that 44 of the 47 federal job-training programs that exist under current law overlap in some way. The two-year sector seems to support the legislation. It faces an unclear future, however, in part because the House passed a much different job training bill earlier this year. The House-passed bill (H.R. 803) would consolidate 35 employment and training programs into one fund that would serve as a single source of support for employers and job seekers. Funding for those programs would be merged into a block grant to the states.
Audit of financial transparency of for-profits. Financial information that for-profit colleges submit to the U.S. Department of Education is inconsistent and generally not helpful, according to an audit by the department’s Office of Inspector General. For-profits provide financial statements to the department as a requirement of their participation in federal financial aid programs but those statements lack transparency, the audit found, because the presentation of instruction and marketing costs is not consistent across institutions. The audit reports, “We determined that the audited financial statements that proprietary schools submitted to the department under 34 C.F.R. § 668.23 generally did not provide transparent information because the presentation of instruction and marketing expenses was not consistent across schools. We concluded that the financial information reported by schools is generally not useful to the department for purposes of identifying how schools spent their funds or making meaningful comparisons of financial information across schools participating in the Title IV, Higher Education Act programs.”
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 Aug. 5, 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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