In a bid to break the stalemate over offsets for student loan interest rate legislation, Republican leadership in the House and Senate proposed two alternative proposals on Thursday. While general agreement exists on the desire to extend the current 3.4% interest rate on federal student loans for one year, delaying an increase to 6.8% scheduled for July 1, lawmakers have been unable to come to consensus on how to pay for the estimated $5.9 billion cost. On April 27, the House passed a bill (H.R. 4628) eliminating funding for the Prevention and Public Health Fund to pay for the interest rate extension, while Senate Democrats are pushing a bill (S. 2343) which would end a tax benefit for S corporations. House Speaker John Boehner (R-OH), House Majority Leader Eric Cantor (R-VA), Senate Minority Leader Mitch McConnell (R-KY), and Senate Minority Whip Jon Kyl (R-AZ) sent a letter to President Obama, asking that he work with them to pass bipartisan student loan interest rate legislation. The first option would offset the interest rate extension’s cost by increasing retirement contributions from federal employees by 0.4% each year for 2013-2015. The Congressional Budget Office (CBO) has estimated that the increase, which was also included in the administration’s FY2013 budget request, would raise $8 billion in revenue through 2017, and $18 billion through 2022. The Republicans’ second offset proposal is a combination of three smaller measures. First, the duration of the in-school interest subsidy for subsidized federal loans would be limited to 150% of the usual time required to complete the degree program being pursued, for an estimated $1.1 billion in federal savings over 10 years. Second, the Medicaid healthcare provider tax threshold would be gradually scaled down to 5.5% beginning in 2013 for $11.3 in savings over 10 years. Lastly, state and local government pension payers would be required to determine whether a worker’s pension is derived from government employment in order to prevent Social Security overpayments, for $2 billion in savings over 10 years. All three proposals are similar to those put forth in recent administration budget requests.
Congressman David Rivera (R-FL) introduced the Studying Towards Residency Status Act (H.R. 5869) on Wednesday as an alternative to DREAM Act legislation championed by Senate Majority Whip Dick Durbin (D-IL), which has been offered and rejected in various forms over the past several years. Sen. Durbin’s latest bill (S. 952) would provide a path to citizenship for certain children of undocumented immigrants who attend college or serve in the military. Under Congressman Rivera’s bill, undocumented immigrants who entered the U.S. before they turned 16 and have lived here for five consecutive years would be eligible for conditional non-immigrant status for five years if they have graduated from higher school and been accepted to a four-year institution of higher education. Fellow Republican from Florida, Sen. Marco Rubio has said that he plans to introduce an additional DREAM Act alternative by the end of the summer which would provide visas—although not a path to citizenship—to the children of undocumented immigrants who attend college or serve in the military.
On Thursday, the Education Department announced the College Savings Account Research Demonstration Project, which will provide about 10,000 high school students participating in the GEAR UP program for low-income students with college savings accounts and financial counseling. The impact of the savings accounts and counseling on college access and success will contribute to policy recommendations at the local, state, and federal levels.
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 June 4, 2012.
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.