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.
News and updates
Overview of STEM Education Bills Recently Introduced
Several bills have been introduced this summer surrounding the issue of STEM Education from elementary school through college, with the aim of increasing access for students to these subjects and preparing them for the 21st century workforce. Below is a quick overview and analysis of a few of these bills that we have been keeping our eye on.
HR 2159 – 21st Century STEM Competitive Jobs Act
Sponsor: Representative Bill Foster (D-IL)
Introduced: 5/23/13
Current Status: Referred to the House Committee on Education and the Workforce
Summary: This legislation aims to solve the problem that many employers face, which is that students are not adequately prepared for what the field needs. The goal is to encourage schools and employers to partner together to develop curriculum and program metrics, provide dual high school and college credit, and include an internship or apprenticeship as part of the program. The bill would provide competitive grants to school districts who collaborate with employers.
HR 2592 – STEM Innovation Networks Act of 2013
Sponsor: Representative Mike Honda (D-CA)
Introduced: 6/28/13
Current Status: Referred to the House Committee on Education and the Workforce
Summary: Similar to Representative Foster’s bill, this piece of legislation also encourages public-private partnerships and creates a grant program to promote this. In addition, the bill also supports the development of teachers who prepare students for post-secondary schooling and employment in STEM fields.
**Washington Congressmen Rick Larsen and Jim McDermott are Cosponsors of this bill.
S 1407 – Computer Science Education and Jobs Act of 2013
Sponsor: Senator Bob Casey (D-PA)
Introduced: 7/31/13
Current Status: Referred to the Senate Committee on Health, Education, Labor, and Pensions
Summary: This is a bipartisan bill that Senator Casey introduced with Senator Marco Rubio (R-FL) to address the issue of a lack of computer science education in K-12 schools. The Senators’ claim that computer science is the primary driver for job growth in the STEM fields, and increasing access and exposing children to computer science education at the elementary and secondary school levels will pique their interest and position themselves for high-skilled, good-paying jobs in the future. The legislation aims to clarify federal policies to make sure that computer science programs in states are eligible for federal funding.
Talks of a Continuing Resolution Gaining Momentum
With Congress officially on their 5-week August recess and only nine legislative days left (House) before the end of the federal fiscal year, talks around DC of a Continuing Resolution (CR) seem to be gaining momentum. Just before departing last week to their respective districts, progress on several remaining FY14 spending bills stalled and it is highly unlikely that both parties could come to an agreement and finish the appropriations process before the September 30th deadline. Reports have come out that Republicans may push for a short-term CR of around 2 months, which would push the process to November – right around the time we are set to once again bump up against the debt limit. Democrats, hoping to avoid a situation where the debt ceiling is used as a negotiation tactic once again, are speaking out against a short-term CR and calling for something longer.
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.
House to take up Senate-passed Student Loan Deal Today
The House is expected to consider and vote on a bipartisan student loan deal that passed the Senate last week on an 81-18 vote. The deal ties interest rates to the rate on 10-year treasury bonds. The bill is intended to be a long-term solution and also a retroactive fix to July 1st of this year when loan rates doubled from 3.4% to 6.8%. The legislation will set interest rates this year at 3.86% for all new undergraduate Stafford loans, 5.4% for graduate Stafford loans, and 6.4% for PLUS loans. Caps for loans are set at 8.25% for undergraduate loans, 9.5% for graduate loans, and 10.5% for PLUS loans. While this means that undergraduate loan rates for the next couple of years will hover around a low 4%, there’s a potential that eventually rates could rise higher than they are now before they bump up against the caps.
The vote is set to take place this evening and is expected to pass.