Senator Alexander (R-TN) and 13 co-sponsors introduced the Republican alternative in the Senate, the Interest Rate Reduction Act (S. 2366) on Wednesday (April 25, 2012). The bill provides a one-year extension of the 3.4 percent interest rate and uses the Prevention and Public Health Fund as an offset. S.2366 is identical to H.R. 4628, also known as the Interest Rate Reduction Act. H.R. 4628 was introduced by Rep. Judy Biggert (R-IL).
House Democrats proposed a different offset: They introduced a bill – the Stop the Rate Hike Act of 2012 – Wednesday (April 25, 2012) that would pay for the one-year extension of the current student loan interest rate by ending tax subsidies to oil and gas companies.
Speaker of the House John Boehner (R-OH) passed the House Republican measure on Friday, April 27.
This week, the Senate began consideration of its bill. On Tuesday, May 8, Senate Republicans blocked the bill by a vote of 52-45, falling short of the 60 needed to proceed. Without a new path forward, Majority Leader Harry Reid (D-NV) nixed a scheduled revote on Thursday, May 10.
Further complicating the matters in the Senate on Thursday, Reid said that a Republican was attempting to offer a student loan amendment to the Export-Import Bank bill also pending on the floor.
Both sides have agreed that the hike on student loan interest rates should be postponed, but disagree on how to offset the $6 billion extension cost.
The Senate will resume debate on the measure next week.
For-Profit Institutions Executive Order
On Friday, April 27, President Obama signed an executive order cracking down on for-profit colleges that prey on service members and veterans to collect tuition dollars without providing a meaningful education in return.
The order reflects many initiatives veterans groups have been pushing for since January, which also has resulted in a number of new bills being introduced in Congress.
Senators Harkin and Durbin recently introduced the Protecting our Students and Taxpayers Act to address the issue.
The order signed by the President directs the Departments of Defense, Veterans Affairs, and Education to establish “principles of excellence” for educational institutions targeting the military community to “strengthen oversight, enforcement and accountability.”
The order notes that some schools have recruited veterans with “serious brain injuries or emotional vulnerabilities” without providing academic support or counseling. Some have pushed veterans into costly institutional loans rather than cheaper federal loans. Others refuse to disclose performance data such as graduation rates.
Specifically, the executive order requires:
More transparency – To accept GI Bill or military tuition assistance money, schools will have to provide applicants with completed “Know Before You Owe” financial aid forms developed by the Consumer Financial Protection Bureau and the Department of Education.
Installation ban – DoD will set new rules for allowing educational institutions to gain access to military bases, banning those found to have use deceptive recruiting or marketing practices.
Curb misleading online recruiting – VA is seeking trademark protection for terms like “GI Bill” and “military-friendly” to prevent for-profit schools from using them on what appear to be government endorsed websites that lure enrollees.
Veterans’ complaint system – VA, DoD and the education department will create a centralized complaint system for students using military and veterans’ educational benefits.
Data on educational institutions – The same departments are to develop student outcome measures for participating schools. That data will be available on the Education Department’s College Navigator website.
Improved support – Colleges participating in military and veterans’ education must do more to meet students’ needs, providing them with clear educational plans, academic and financial aid counseling, and improving their ability to re-enroll, or get refunds, if they leave for service-related reasons.