DC Shuttle: Still Wrestling with Student Loan Interest; No Child Left Behind

Student loan rates. The Senate rejected two proposals to extend low interest rates on student loans after they expire on July 1. Without legislation, interest rates will double from 3.4% to 6.8% with the expiration of the one-year fix put in place last summer. Movement to proceed with a Senate Democratic bill (S. 953) to extend the current 3.4% fixed interest rate for two additional years was rejected by a vote of 51-46. The Senate also considered, and rejected by a vote of 40-57, cloture on a Senate Republican measure (S. 1003) which would set the interest rate for all loans at the 10-year Treasury note plus 3%. Savings generated from the plan would be used for deficit reduction, and Republicans have pointed out that the proposal is similar to that of President Obama. Numerous legislative proposals remain, including a House-passed Republican bill (H.R. 1911) which would also avert the rate hike by shifting to a market-based variable rate pegged to the 10-year Treasury note. The bill passed the House 221-198 on May 23. The House bill would peg interest rates to the 10-year Treasury note rate plus 2.5 percentage points for the subsidized and unsubsidized portions of undergraduate loans and plus 4.5 percentage points for graduate loans. Those rates would be capped at 8.5% and 10.5%, respectively, and the interest rates would be calculated yearly. The White House plan would peg interest rates to the 10-year Treasury note rate plus 0.93% for the subsidized portion and 2.93% for the unsubsidized portion. It would modify the loan for graduate students to 3.93% above the 10-year Treasury note. The rates would remain fixed for the life of a borrower’s loan, as opposed to being recalculated yearly, and there would be no cap. Another Senate Democratic proposal (S. 909) would set rates every year based on the 91-day Treasury bill, plus a percentage determined by the Education secretary. Under the plan, interest rates for subsidized Stafford loans would be capped at a maximum of 6.8%, and rates for unsubsidized Stafford and graduate student loans would be capped at a maximum of 8.25%. Lawmakers on both sides of the aisle have said they are committed to continuing negotiation and passing legislation before the July 1 deadline.

Harkin introduces ESEA reauthorization. Sen. Tom Harkin (D-IA) introduced a bill (S. 1094) that would update the Elementary and Secondary Education Act (ESEA), making changes to the previous reauthorization, known as No Child Left Behind. The 2001 No Child Left Behind law expired in 2007. Harkin’s bill is designed to give school districts more flexibility in creating personalized student accountability systems and evaluation systems for teachers and principals and in intervening to improve failing schools. The legislation also includes language that would require states to expand early childhood education initiatives, such as guidelines for what children should know and be able to do prior to kindergarten entry to reduce gaps in school readiness, as well as incentives for states to provide full-day kindergarten if they don’t already. The bill largely mirrors legislation approved during the previous Congress by the Health, Education, Labor and Pensions Committee, which Harkin chairs. While No Child Left Behind was criticized for being strict and standardized, its data-collection provisions have been met with some praise and are expanded in this bill. Harkin’s bill would require school districts to continue separating student achievement data across subgroups to highlight any potential disparities and expand the categories to include gender and English proficiency. The bill also includes a provision that would alter the way funding is dispersed for the Title 1 program for school districts that serve low-income students. The provision would ensure that local and state resources per pupil for Title 1 schools are equal to or greater than the average combined local and state funds per pupil in non-Title 1 schools. The Obama administration’s waiver program has freed 37 states and the District of Columbia from many of the requirements in the current No Child Left Behind law’s accountability system. Harkin’s bill takes that into consideration by allowing a state to continue to use its Education Department-approved accountability system. Unlike last year’s bill, the bill Harkin introduced Tuesday includes language requiring states and local school districts to develop their own teacher-evaluation system. The bill would write into law the Obama administration’s signature competitive education grant program, Race to the Top, which was created with funding from the economic stimulus program and has been funded by appropriators since then, though it has never been written into law. It also writes into law another competitive grant program, Investing in Innovation, created with stimulus funding. The Committee on Health, Education, Labor, and Pensions is scheduled to markup Harkin’s proposal on Tuesday. Among others, Senators Christopher Murphy (D-CT), Bernard Sanders (D-VT) Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI) have signed on to cosponsor the bill.

Alexander and Kline introduce ESEA reauthorization. Sen. Lamar Alexander (R-TN), Ranking Member of the Senate Health, Education, Labor and Pensions Committee, introduced an alternative proposal to reauthorize the Elementary and Secondary Education Act, known in its current form as No Child Left Behind. The bill (S. 1101) would give states and local school districts more control over how they spend federal education dollars by consolidating the law’s various programs into two large block grants. House Education and the Workforce Chair John Kline (R-MN) introduced similar legislation (H.R. 5) in the House, which would consolidate most funding into one block grant, and scheduled a June 19 markup. The proposals would eliminate the current accountability system and allow states to develop their own academic standards and assessments.

STEM education hearing. The House Committee on Science, Space and Technology held a hearing on STEM education policy. Lawmakers agreed that the government should be doing more to promote STEM education. The Obama administration has proposed reorganizing 226 programs at a dozen agencies as way to better target $3 billion worth of STEM education investments. The proposal, contained in the administration’s 2014 budget request, would concentrate resources at three agencies; the Department of Education for elementary and secondary school programs, the National Science Foundation (NSF) for undergraduate and graduate programs, and the Smithsonian Institution for informal and public science activities. In opposition to the president’s proposal, lawmakers from both parties also agreed on concerns related to the proposal, including the reduced funding for STEM education programs at NASA, the National Institutes of Health (NIH), the Department of Energy (DOE), and the National Oceanic and Atmospheric Administration.

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 10, 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.



Leave a Reply

  • (will not be published)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>