The Senate failed to invoke cloture this morning and will not move forward on Sen. Elizabeth Warren’s (D-MA) bill to refinance student debt. The Senate voted of 56-38, which is less than the 2/3rds required to move forward.
Category: College Costs
Cloture Filed on Student Loan Bill
Senator Majority Leader Harry Reid (D-NV) filed a cloture motion on proceeding to the student loan bill (S 2432) that would allow borrowers to refinance their old student loans at the current lower interest rates.
The cloture vote would occur on Wednesday.
Cloture, under the Senate rules, ends debate on the bill and allows for final passage. To evoke cloture and proceed, two thirds of Senators must for cloture and agree to end debate.
This would be the first political test for the measure.
Senate VA Reform Agreement Includes In-State Tuition Provisions
Late last week, Senators Bernie Sanders (D-VT) and John McCain (R-AZ) announced a deal to salvage sought-after Veterans Administration reform in the wake of the on-going VA scandal. The legislation would allow for the reform the Department of Veterans Affairs to expand veterans’ access to health care and make it easier to fire VA officials for misconduct.
Also included, the measure would provide some educational benefits to veterans by providing in-state tuition for all veterans at public colleges and universities, GI Bill tuition benefits to the spouses of troops killed in the line of duty and increased access to health care for sexual assault victims.
The provision mirrors a measure, HR 357 – the GI Bill Tuition Fairness Act, which passed the House earlier this year with a vote of 390-0.
The Senate may consider the bill later in the week.
Obama Aims to Ease Student Debt
President Obama announced today a new executive order aimed at easing student borrowers’ debt loads by capping repayments at 10 percent of their monthly income. Obama also made student loans the focus of his weekly address on Saturday, saying he’d be taking action this week.
The executive order will expand on a 2010 law, the Bipartisan Student Loan Certainty Act, that capped borrowers’ repayment. The law left a hole in eligibility for people with older loans — anyone who borrowed before October 2007 or stopped borrowing by October 2011, which is approximately 5 million borrowers — were not eligible for the cap. The executive order will close the hole, but relief, however, would not be available until December 2015. The time is needed for the Department of Education (ED) to propose and put new regulations into effect.
In addition, the President will announce that ED will renegotiate contracts with companies that service federal loans to give them additional financial incentives to help borrowers avoid delinquency or default. Further, both ED and Treasury will work with the nation’s largest tax-preparation firms, H&R Block and Intuit Inc., to ensure that borrowers are aware of repayment options and tax credits for college tuition.
Finally, the President is expected to urge the swift passage of S 2292, the Bank on Students Emergency Loan Refinancing Act. The measure introduced by Senator Elizabeth Warren (D-MA) last week and has been championed by people like Senators Murray and Cantwell. The measure would would allow an estimated 25 million Americans to refinance student loans, federal and private, at lower interest rates. Reduced interest payments would cost the government about $58 billion over 10 years, according to the Congressional Budget Office, but the legislation would raise $72 billion by imposing a new tax on some high-income individuals.
Fact Sheet on the Legislation Available here.
Bill Text Available here.
The Senate is expected to consider Warren’s bill (as S 2432) this week, but the measure has little chance of consideration by the House.
Senate Committees Hold Hearings on Student Loans
This morning Senators discussed student loans in two simultaneous committee hearings.
The Senate Budget Committee, which is chaired by Washington State’s Senator Patty Murray, held a full committee hearing titled, “Impact of Student Loan Debt on Borrowers and the Economy.” Key witnesses in the hearing included representatives from the Consumer Financial Protection Bureau, the Student Virginia Education Association, and the Contemporary History Institute at Ohio University. A video of the hearing and written testimony can be found here.
Over in the Senate Banking, Housing and Urban Affairs Committee, the Subcommittee on Financial Institutions and Consumer Protection held a hearing titled, “Student Loan Servicing: The Borrower’s Experience.” Scheduled witnesses included representatives from the Student Veterans of America, the American Federation of Teachers, the Heritage Foundation, and the Denison University director of financial aid. A webcast of the hearing along with written testimony can be viewed on the Committee’s website here.