From our partners at the SUS Washington office on Developments in Loan interest Rates and Immigration/Higher Ed.: With the Congressional deadline on the student loans less than two weeks away, negotiations in the Senate appear to be making progress with some Senators now saying there will be compromise legislation on the floor next week. Democratic and Republican Senators are engaged in discussions with the Administration. At a Senate Budget hearing yesterday (attended by Sen. Bill Nelson), Education Secretary Arne Duncan said he will be back on Capitol Hill Thursday along with National Economic Council Director Gene Sperling to continue talks on crafting a bill that can gain 60 votes in the Senate. Key Senators are Republican Lamar Alexander (R-TN), Democrats Tom Harkin (D-IA), Jack Reed (D-RI), Joe Manchin (D-WV), Harry Reid (D-NV) and Independent Angus King of Maine. Issues include whether to peg the interest rate to the 10-year Treasury bill or the 91-day Treasury note which has been used in the past as a benchmark for student loans. Also, negotiators will have to decide on what additional percentage tack on to the rate and whether to cap the interest rate which Republicans and some Democrats favor. The President had proposed no cap but instead would lock the rate at the start of the loan. Immigration bill and education costs – This morning the Congressional Budget Office released its scoring (see attachment) of the Senate immigration reform bill, S.744, currently on the Senate floor showing the bill would reduce the deficit by $197 billion over 10 years. For education spending assumptions due to provisions in the bill, the analysis says direct discretionary spending for higher education programs would increase by $400 million between Fiscal 2014 and 2023. Direct spending on federal student loans is expected to increase by $20 million over the period, and Pell grant spending would go up $350 million. Participation in higher education student aid programs for immigrants and their children is expected to be somewhat less than the current U.S. population. CBO assumes new immigrants will be more likely to be eligible for means-tested federal loans and Pell grants and those who enroll would be more likely to enter two-year programs thus needing less in the way of aid to fund their education. The bill’s STEM Education and Training Account fees to be paid by employers sponsoring noncitizens for employment would bring in about $150 million per year and eventually net direct spending in the STEM area by the Education department would decline by about $270 million over the 10-year period.
Posted on: Wed, 19 Jun 2013 16:42:27 +0000
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