WASHINGTON -- Senate Democrats introduced a bill Wednesday that would keep the interest rate on subsidized student loans at 3.4 percent for another two years at a cost to the government of $8.6 billion -- a measure that underscored the distance between Congressional Democrats and the White House on interest rates. The interest rate for subsidized Stafford loans, need-based loans that don't accumulate interest while students are enrolled in college, will double to 6.8 percent on July 1 if Congress does not act.
The interest rate increase was long planned -- it was written into a 2007 law that gradually lowered interest rates for four years before letting them rebound -- and was supposed to occur last year, but Congress passed a one-year extension of the 3.4 percent rate. The White House and Congressional Republicans have both proposed plans to base the interest rate on the government's cost to borrow, which would allow the rate to vary from year to year.
Congressional Democrats, though, want to keep the rate at 3.4 percent until the issue can be considered in the reauthorization of the Higher Education Act. The legislation proposed Wednesday, sponsored by Senator Tom Harkin, the Iowa Democrat who is chairman of the Committee on Health, Education, Labor and Pensions, and Senate Majority Leader Harry Reid, among others, would pay for the extension through changes to tax law affecting retirement accounts, the oil industry and tax deductions for foreign companies. The House, meanwhile, will mark up its interest rate proposal at a hearing today.
WASHINGTON -- Senator Elizabeth Warren, a Massachusetts Democrat, is using an unusual tactic to promote a bill she proposed on student loan interest rates: asking for "citizen co-sponsors" for the legislation. The bill, one of many proposals put forward in recent weeks to stop the interest rates for subsidized student loans from doubling as planned on July 1, would reduce student loan interest rates to 0.75 percent for a year -- the rate at which the Federal Reserve lends to major banks.
President Obama and House Republicans want a market-based rate for student loan interest; some Senate Democrats would prefer to extend the current subsidized loan interest rate of 3.4 percent while they work to reauthorize the Higher Education Act.
So Warren's measure isn't likely to pass. But as the first stand-alone legislation from the closely watched freshman senator, it has generated considerable interest online. "If Congress doesn't act by July 1, our students will pay nine times more than big banks," Warren said in an e-mailed appeal to supporters sent via a liberal political action committee, Democracy for America. "Our students are the engine of our economic future, and they deserve at least the same deal as Wall Street."
WASHINGTON -- Senators Marco Rubio, Ron Wyden and Mark Warner introduced a bill Thursday to require colleges to disclose data about their students' salaries in the first year after graduation. The measure would require colleges to break down salary data by major or program of study, as well as require them to report more information on remediation rates, debt for students who graduate and those who drop out, and continuation rates to graduate education. It would also disaggregate outcomes for Pell Grant and G.I. Bill recipients.
The bill would also repeal the ban on a federal unit record data system to track students' outcomes in college and beyond. The previous version of the bill would have circumvented the ban by linking state unit record databases. Some House Republicans, privacy advocates and private colleges strongly opposed the creation of such a database in 2006, when it was proposed by the Bush administration.
The bill, the Student Right to Know Before You Go Act, was first introduced in the last Congress; since then, transparency about graduates' debt and salaries has become a point of agreement for the Obama administration and some Congressional Republicans. Many colleges oppose it, arguing that information about salaries doesn't accurately capture the value of a higher education, particularly only one year after graduation. The measure picked up a new Democratic co-sponsor, Warner, of Virginia. The bill's counterpart in the House of Representatives was co-sponsored by Duncan Hunter, Republican of California, and Robert Andrews, Democrat of New Jersey.
The University of Windsor sits just across the Canadian border from Detroit, yet Americans make up just 82 of its nearly 2,000 international students. So the Canadian institution is trying to woo those south of the border, by cutting its tuition in half for Americans, the CBC reported. Under the policy change late last month, American students will pay $5,000 a semester, down from the current $10,000 and significantly less than the $15,000 some international students pay. "The international relationship we have with folks right across the river is much different than the relationship we have with [other] countries around the world," Windsor's president, Alan Wildeman, told the CBC.
The university's billboards around Detroit encourage locals to "put the 'u' in neighbour."
WASHINGTON -- While the Pell Grant is exempt from the mandatory, across-the-board budget cuts that went into effect in March, other federal higher education grants are not. Iraq-Afghanistan Service Grants, for the children of members of the military killed in action, have been cut back by 10 percent for new recipients beginning March 1, the Education Department announced in guidance issued Friday. TEACH Grants, for students planning to become teachers in high-need areas, have been reduced by 7.1 percent.
WASHINGTON -- As Congress begins the long process of renewing the Higher Education Act, the leaders of the House Committee on Education and the Workforce published an open letter to higher education "stakeholders" Thursday, asking for suggestions on rewriting the sweeping law governing federal financial aid programs. Representatives are especially interested in a few areas, they wrote: empowering "students as consumers"; simplifying student aid and loans; increasing affordability, accountability and completion; reducing costs; and balancing "the need for accountability with the burden of federal requirements."
In a statement, the committee's chairman, Representative John Kline, a Minnesota Republican, emphasized paring regulations, simplifying financial aid and providing families with better information. Representative George Miller, a California Democrat, said he hoped to focus on the increasing price of higher education, student debt, barriers to completion, and community colleges.