Student loan interest rate bill sent to president. On Wednesday, the House approved the Bipartisan Student Loan Certainty Act (H.R. 1911) by a vote of 392 to 31. The Senate passed the legislation the previous week and the bill is headed to the president, who has endorsed the legislation, for approval. The bill would modify how interest rates on federal student loans are set, tying interest rates to market rates, with loan interest rates fixed for the period of the loan. The bill would apply to all loans, except Perkins loans, issued on or after July 1, 2013. Interest rates would be pegged to the 10-year Treasury note, plus 2.05% for subsidized and unsubsidized portions of undergraduate loans, 3.6% for graduate loans and 4.6% for PLUS loans. The maximum rate would be capped at 8.25% for undergraduate loans, 9.5% for graduate student loans, and 10.5% for PLUS loans. The bill calls for a broader government study of college costs, at the request of Education Committee Chair Tom Harkin (D-IA). Harkin has suggested the rates could be revisited as Congress begins to address the reauthorization of the Higher Education Act, saying the results of the proposed study on college costs would provide important context. The Congressional Budget Office "scores" the proposal at about $700 million.

Workforce Investment Act approved by Senate panel. On Wednesday, the Senate Health, Education, Labor and Pensions Committee approved a renewal of the Workforce Investment Act (WIA), the federal law that governs workforce training, by a vote of 18 to 3. The bill (S. 1356) would overhaul a broad range of job-training programs at community colleges, which haven't been updated in 15 years. The measure would reauthorize the 1998 Workforce Reinvestment Act which expired in 2003. Under the bill, states would submit a single plan detailing their workforce development and training efforts, and use a single set of performance indicators to evaluate program success. A 2011 Government Accountability Office (GAO) report found that 44 of the 47 federal job-training programs that exist under current law overlap in some way. The two-year sector seems to support the legislation. It faces an unclear future, however, in part because the House passed a much different job training bill earlier this year. The House-passed bill (H.R. 803) would consolidate 35 employment and training programs into one fund that would serve as a single source of support for employers and job seekers. Funding for those programs would be merged into a block grant to the states.

Audit of financial transparency of for-profits. Financial information that for-profit colleges submit to the U.S. Department of Education is inconsistent and generally not helpful, according to an audit by the department's Office of Inspector General. For-profits provide financial statements to the department as a requirement of their participation in federal financial aid programs but those statements lack transparency, the audit found, because the presentation of instruction and marketing costs is not consistent across institutions. The audit reports, "We determined that the audited financial statements that proprietary schools submitted to the department under 34 C.F.R. § 668.23 generally did not provide transparent information because the presentation of instruction and marketing expenses was not consistent across schools. We concluded that the financial information reported by schools is generally not useful to the department for purposes of identifying how schools spent their funds or making meaningful comparisons of financial information across schools participating in the Title IV, Higher Education Act programs."

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council's Weekly Washington Report Higher Education Update, of Aug. 5, 2013.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.

Senate Health, Education, Labor and Pensions (HELP) Committee Chair Tom Harkin (D-IA) is sponsoring legislation to prevent colleges from using federal student aid revenue, including Post 9/11 GI Bill benefits, to fund marketing activities. Sen. Kay Hagan (D-NC), who is also sponsoring the not yet introduced bill, said that it would "protect taxpayers' investment of billions of dollars in student financial aid by ensuring that it is used to help students succeed in college, not out-of-control advertising, marketing and recruitment budgets." While the legislation would apply to all colleges and universities receiving federal student aid, it is largely perceived to be targeted at for-profit universities. Sen. Harkin cited a HELP Committee report showing that marketing expenses at 15 of the largest for-profit higher education companies made up an average of 23% of their budgets, compared with an average of 0.5% for nonprofit institutions. In some cases, for-profit colleges spent significantly more per-student on recruitment than on instruction. The industry group called the Association of Private Sector Colleges and Universities argued that for-profit colleges need larger recruitment budgets because the nontraditional students they serve are more difficult to attract than traditional, college-bound high school graduates. Democrats and particularly Republicans in the House have responded to HELP Committee attempts to increase regulation of for-profit colleges with skepticism and concern over the potential loss of educational opportunity for the nontraditional students attending their programs.

On Tuesday, the House Education and Workforce Committee discussed the proposed (H.R. 4297) to reauthorize the Workforce Investment Act (WIA), which expired in 2003. Ranking Member George Miller (D-CA) expressed concerns that the bill's plan to consolidate 27 current programs into a single funding stream could disadvantage underserved populations which were specifically targeted under the individual programs. The legislation would also allow governors to consolidate additional programs if they hold to certain performance measures to judge the success of the resulting programs. Rep. Virginia Foxx (R-NC), one of the bill's sponsors, countered that five of the programs in question have either never been funded or haven't been funded for several years, and an additional seven are targeted for consolidation under the House Democrats' version of the legislation (H.R. 4227). Bill supporters cited a 2011 Government Accountability Office report which found that 44 of WIA's 47 current programs overlap with each other in some way, and argued that this duplication wastes money and causes confusion for job training program applicants. Committee member John Tierney (D-MA), a sponsor of the Democrats' bill, said that despite continuing disagreement, he believes the committee members will find sufficient common ground to move forward with a bipartisan proposal. He said that he expects the panel to take up the bill for a vote as soon as this week.

On Thursday, President Obama announced the release of his blueprint for reauthorizing the 2006 Perkins Career and Technical Education Act (CTE), which expires at the end of this year. The $1 billion proposal would align CTE training programs with the skills needed for in-demand occupations in high-growth industries, implement performance measures for the programs, and encourage collaboration with high schools, colleges and employers to improve CTE programs through competitive grants. Senate HELP Committee Chair Harkin and Sen. Patty Murray (D-WA) have both introduced legislation to tailor students' skills to those in demand in the workplace (S. 2252, S. 830, respectively), and both applauded the administration's proposal.

As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. This edition is drawn from the Council's Weekly Washington Report Higher Education Update, of April 23, 2012.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit: www.newenglandcouncil.com.

The Labor-HHS-Education appropriations bill's $158 billion in discretionary funding provides a 0.12% funding increase from FY 2011 Education Department funding levels, and includes a provision to maintain Pell Grants at their current $5,550 maximum level. FY 2012 funding for the Education Department's Race to the Top competitive grant program would match current funding at $698.6 million. The Promise Neighborhoods program to improve student achievement in at-risk communities would have its current funding doubled. Approval for the spending came over Republican objections that the bill would provide $4.5 billion in funding to implement the 2010 healthcare reform law.

At a Thursday hearing of a Senate Homeland Security and Governmental Affairs subcommittee, Chair Thomas Carper (D-DE) said that he hopes to introduce legislation this year to change the 90/10 rule for for-profit colleges, which requires that institutions gain no more than 90% of their revenue from federal sources in order to receive federal student financial aid. Because military benefits aren't counted as federal revenue under the 90/10 rule, critics allege that for-profit colleges aggressively recruit veterans as a means of complying with the rule. Shortly before the hearing, Senate HELP Committee staff released a new study in cooperation with the Department of Veterans Affairs (VA) which indicated that of the 10 largest recipients of post-9/11 GI Bill student aid in the 2010-11 school year, eight were for-profit colleges. According to the report, for-profit colleges received approximately 37% of the $4.4 billion total GI Bill aid disbursed, while almost 60% of students from those top eight for-profit colleges withdrew within a year of enrolling. Spokespersons from veterans groups as well as Curtis Coy, deputy undersecretary for economic opportunity at the VA, asked lawmakers to count military benefits as federal funds for the purposes of the rule. For-profit advocates argued that many colleges would lose eligibility for federal student financial aid if military benefits were counted as a federal source of revenue, and that changing the rule would only raise program costs to students. Sen. Scott Brown (R-MA) also raised concerns over the VA's move to delegate more oversight responsibility to state approval agencies.

From the New England Council's Weekly Washington Report Higher Education Update, Sept. 26, 2011. NEBHE is a member of the Council and publishes this column each week.

Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.