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This Week in Congress

Below is an overview of relevant House and Senate committee hearings and markups on the schedule this week.

WEDNESDAY, November 13th

House Education and the Workforce
Federal Student Aid
10am, 2175 Rayburn
Full Committee Hearing

Joint Economic
Fiscal 2014 Budget
10am, 1100 Longworth
Conference Committee Meeting

THURSDAY, November 14th

Senate Health, Education, Labor, and Pensions
Federal Student Aid
10am, 430 Dirksen
Full Committee Hearing

House Education and the Workforce
ACA in Schools
10am, 2175 Rayburn
Full Committee Hearing

FRIDAY, November 15th

House Energy and Commerce
STEM Education and Manufacturing Workforce
9:30am, 2123 Rayburn
Subcommittee Hearing

Obama’s Plan for College Affordability

Last Thursday and Friday, President Obama toured several colleges and universities touting a new plan for higher education access and affordability. The Offices of Planning & Budgeting and Federal Relations prepared a brief with additional information about this plan.

White House Releases Higher Education Proposals

As part of the college road show President Obama is undertaking starting today, the White House has released a fact sheet on a series of proposals that the Administration will be promoting on higher education. Some of these proposals require legislative action by Congress, while some can be instituted by the Administration. Other proposals by the Administration urge colleges to take action. The set of proposals focuses on three main areas:

Using Outcome Measures to Guide Student Aid Awards and Funding to Colleges

This area encompasses several proposals, most of which are built off of expanding the Administration’s reporting under their college scorecard:

  • Expands the current college scorecard by the 2015 school year to include things like the percentage of student receiving Pell Grants, average tuition, loan debt of students, graduation and transfer rates and earnings of graduates. The fact sheet implies the Department of Education can take these steps unilaterally but the collection of some data by the Department such as graduate earnings could be problematic given current restrictions on student level data collection in the Higher Education Act. 
  • Seeks, by 2018, to tie the rating system to student aid awards by providing students attending high performing colleges with larger Pell Grants and “more affordable student loans.” The 2018 element of this proposal would require legislative action by Congress.
  • Reiterates the call for the Administration’s College Race to the Top proposal, first made as part of their 2014 budget, and calls for bonuses to be paid to colleges based on the number of Pell recipients they enroll. This would require legislative changes.
  • Requires students to complete a certain percentage of classes before receiving their full student aid (Pell Grants and loans) allocation – there is not a great amount of detail on this, but it seems to imply that Pell Grants and loans may be available for schools to draw down in some sort of installments based on completion of classes by students. This would require legislative action by Congress.

Challenging Colleges to Further Innovate

This area largely seems focused on encouraging colleges and others to do what some are already doing by calling for a greater focus on competency-based education, expansion of Massive Open Online Courses (MOOCs), expanding e-advising and other student services and encouraging dual enrollment. The Administration reiterates its support for its First in the World proposal (from its last few budgets) and the last installment of the Trade Adjustment Assistance Community College funding. The Administration also focuses on the experimental sites authority saying they will encourage “high-quality, low-cost innovations” including offering Pell Grants to high school students taking college courses and credit for prior learning. Other than seeking funding for the First in the World initiative, none of this would seem to require legislative action by Congress and some of it is just calling on actions by schools and others.

Addressing Student Debt

The Administration reiterates its proposal to expand Income-Based Repayment (IBR) to all students (regardless of when they might have first borrowed) to cap loan payments for borrowers under the program to 10 percent of their monthly income. This proposal was also made by the Administration as part of their solution to the recently enacted student loan interest rate issues. The Department of Education will also take on an outreach effort to educate borrowers about IBR. The expansion of IBR would require legislative changes.

Sources: White House, Penn Hill Group

Obama to Sign Student Loan Interest Rate Bill

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.

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.