President Obama today will sign the bill reversing the student loan interest rate hike and lowering rates on new student loans this year. The compromise is retroactive to July 1, when the interest rate doubled for federally subsidized student loans. This compromise mirrors the proposal that Obama recommended in his budget request for the FY14 that called for market-based interest rates based on the 10-year Treasury note.
Category: 2014 UW Federal Agenda
Student Loan Bill Approved by Congress
Last night, the House approved the Bipartisan Student Loan Certainty Act (HR 1911). This bill:
- Sets the annual interest rate on Direct Stafford loans and Direct Unsubsidized Stafford loans issued to undergraduate students at the rate on high-yield 10-year Treasury notes plus 2.05%, but caps that rate at 8.25%;
- Sets the annual interest rate on Direct Unsubsidized Stafford loans issued to graduate or professional students at the rate on high-yield 10-year Treasury notes plus 3.6%, but caps that rate at 9.5%, and;
- Sets the annual interest rate on Direct PLUS loans at the rate on high-yield 10-year Treasury notes plus 4.6%, but caps that rate at 10.5%.
The President is expected to sign the bill.
HR 1911 is in response to the recent increase in student loan rates from 3.4 percent up to 6.8 percent. Congress calls the bill a compromise but not a perfect solution to rising interest rates. The UW hopes that Congress will revisit this issue when they take up the Higher Education Act later this year.
Fiscal Fight Continues
Congresses has a lot on its “to do” list next week before they break for the month-long August recess. The most pressing issue relates to the budget: lawmakers are trying to determine if they can make a deal on the overall budget numbers since they will only have nine working days when they return to work in September and before the end of the federal fiscal year. There is concern that they will not have enough time to reach an agreement on how to keep the government running into FY14. While most Republicans are focused on keeping the lower spending levels dictated by the 2011 Budget Control Act, Democrats want a broader deal that would replace the sequester.
House and Senate Republicans want a continuing resolution (CR) that to reflect annual discretionary spending of $967 billion, the sequester level dictated by the Budget Control Act of 2011 (PL 112-25). Democrats in both chambers, meanwhile, are hoping to use the CR debate to broker a budget deal that would replace the sequester ahead of the start of FY14 October 1st that would restore the pre-sequester spending cap of $1.058 trillion for discretionary programs.
Unfortunately, it appears that the different sides have spoken to the each other about the potential terms for a CR, and that is what is causing angst with the short work period between now and the end of the fiscal year.
The Office of Federal Relations continues to advocate for preserving funding for research and student aid, as well as a balanced approach for any further deficit reduction efforts.
Continuing Resolution Looking Likely
House Republican leadership is beginning to discuss the possibility of a stopgap spending measure – or continuing resolution (CR) – to keep the government running past the end of the federal fiscal year on September 30th. Discussions are beginning earlier than usual this year due to disagreements between the House and Senate are so large that neither side is optimistic that they can reach a resolution before then.
At this point, it is unclear as to whether the GOP will push for a simple extension at the FY13 level of roughly $988 billion for discretionary spending or try to draw up a stopgap bill at the roughly $967 billion level now written into federal law. Also unclear is how long the CR will last to keep the government funded. One thing is for sure: House Republicans will not work with the $1.058 trillion level for discretionary spending advocated by Senate Democrats.
In the midst of all this, House and Senate Appropriators continue to move bills forward in their respective chambers. The House Appropriations Committee is on track to end this week with 10 of its 12 FY14 bills approved. In addition to the work on the Labor-HHS-Education bill, the Interior-Environment panel marks up its draft on Tuesday and the full committee acts Wednesday on the State-Foreign Operations bill.
Senate leadership will attempt to bring their first FY14 spending bill – Transportation-HUD – to the Senate floor for consideration Tuesday. Senate appropriators are slated to approve this week the Financial Services and State-Foreign Operations measures, the ninth and 10th annual measures to move through the committee. The Senate Defense bill is expected to be marked up next week, the last work week before the August recess.
Things Heat Up in Congress
Congress returns to work this week under a heat advisory for our fist long stretch of very hot and humid weather in DC. Today is predicted to see 94 degrees in the nation’s capitol, but it will feel more like 101 according to weather.com. And today will likely be the coolest day of the week! The good news (or bad news?) is that most of the action will take place indoors as Congress continues to slog through their cluttered agenda.
FY14 Appropriations: Appropriators in both chambers continue to move their FY14 spending bills forward this week, with the House ready to take up a $512.5 billion defense spending bill that accounts for more than half of the $967 billion in FY14 discretionary spending being considered in that chamber. On Wednesday, House Appropriations will also mark up the $47.4 billion Commerce-Justice-Science bill. The panel the same day will mark up a $17 billion Financial Services bill that would cut the Internal Revenue Service budget by nearly a quarter. Senate Appropriations subcommittees mark up their version of the Commerce-Justice-State and Homeland Security spending bills on Tuesday.
The major issue remains to be the $91 billion budget gap between the two chambers. The House and Senate are preparing spending bills that adhere to vastly different overall numbers, which will make reconciling any of these bills near impossible before September 30th. It is almost certain that we will see short-term continuing resolution this fall, with the final outcome unknown at this time. Continue reading “Things Heat Up in Congress”