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Rep. Ryan Anti-Poverty Plan and Higher Education

On Thursday, House Budget Committee Chairman Rep. Paul Ryan (R-WI) announced what he is calling  a new anti-poverty plan that proposes sweeping changes to the safety net through a state-led pilot program. Announced at the the conservative American Enterprise Institute, Ryan’s plan calls for streamlining the student-aid system, capping federal loans to parents and graduate students, a database for tracking recipients of federal aid, and further consolidation of federal job-training programs.

Big focus points that impact higher education include:

  • Simplify the Free Application for Federal Student Aid.
  • Modernize and reform the Pell program.
  •  Cap federal loans to graduate students and parents.
  • Consider reforms to the TRIO programs.
  • Expand funding for federal Work-Study programs.
  • Build stronger partnerships with post-secondary institutions.
  • Reform the accreditation process.

Some of the proposals in Thursday’s plan mirror ideas in the House Republican road map for reauthorization, including replacing the current patchwork of federal student-aid programs with one grant, one loan, and one work-study program. Both plans would make Pell Grants available year-round, creating “flex” funds that students could draw from until they graduated or exhausted their eligibility for aid. Also, both would remake federal college-access programs, with Mr. Ryan’s plan suggesting a single program.

But the Ryan plan offers more specifics than does the House Republican list, particularly when it comes to accreditation. His plan would make it easier for new accreditors to gain federal approval and would allow accreditors to recognize specific courses, not just colleges or programs.

The plan also calls for the creation of a “Commission on Evidence-Based Policy Making” that would explore whether, and how, to create a federal clearinghouse that could link anonymous participants across programs to provide a more complete picture of their effectiveness. The clearinghouse might also contain state, local, and educational data sets, like National Student Clearinghouse.

As this proposal and others continue to be introduced and move through Congress, the Office of Federal Relations will continue to monitor and update this issue.

Student Loan Interest Rates Rise

Annual student loan interest rates increase tomorrow, July 1st. This represents the first full year loan rates will be tied to the 10-year Treasury note under the deal struck by Congress last summer. Rates will rise from 3.86 to 4.66 percent for undergraduate Stafford loans, 5.41 to 6.21 percent for graduate Stafford loans and 6.41 to 7.21 percent for parent and graduate PLUS Loans. The maximum Pell Grant will also increase tomorrow by $85 to $5,730. The Institute for College Access and Success offers a helpful fact sheet breaking down the changes.

Higher Ed Legislation Advances

Today Senate HELP Chairman Tom Harkin (D-IA) will introduce his plan to reauthorize the Higher Education Act. The Higher Education Affordability Act focuses on four goals: Increasing college affordability, helping struggling borrowers, strengthening accountability, and improving transparency. These goals will be achieved through 21 action points, including tightening for-profit regulations, better accountability metrics for colleges and universities, and a reduction in loan borrower fees.

The Harkin proposal overlaps ever so slightly with goals outlined yesterday by Congressman John Kline (R-MN) and House Education & the Workforce Committee Republicans. Kline plans to introduce the first of a series of HEA-related bills, which will revolve around transparency, accountability, a simplified aid system, and limited federal regulation. We expect to see this bill later in the week.

Also today, the Senate will take up the Workforce Investment and Opportunity Act (WIOA), which would modernize the workforce education system in the U.S. Democratic Senator Patty Murray (D-WA) and GOP Senator Johnny Isakson (R-GA) both spent years negotiating the long overdue reauthorization. Lawmakers will consider the bill under a unanimous consent agreement. This is the first significant step in years toward reauthorization.

And finally, House Ways and Means Committee will mark up today a pair of bills addressing the child tax credit and education tax credits.The education tax bill would streamline a laundry list of credits and expand and make permanent the existing American Opportunity Tax Credit. The Child Tax Credit bill, introduced Monday by Congresswomen Lynn Jenkins (R-KS), would expand the number of individuals and families who can access the credit by increasing the income threshold from $110,000 to $150,000 for joint filers.

Student Loan Bill Fails in Senate

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.

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.