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President to President

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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President to President, April 23-27, 2012

Vol. 13, No. 14

  • ​Competing Student Loan Interest Rate Bills Emerge; House Passes GOP Measure Under Veto Threat
  • President Issues Executive Order to Curtail Deceptive Recruiting Practices Aimed at Veterans
  • Senate Approves Violence Against Women Act Reauthorization

The looming increase in student loan interest rates rose to the top of the federal agenda this week as President Obama made the issue his main focus at events at the University of North Carolina-Chapel Hill, the University of Colorado-Boulder and the University of Iowa.

As you are undoubtedly aware, the interest rate on new subsidized Stafford loans to undergraduate students is scheduled to double to 6.8 percent on July 1 unless Congress intervenes.

Both the Senate and House moved quickly to respond to the new spotlight on the increase, introducing bills—at last count, two in each chamber, sponsored by each party—that would keep the rate at 3.4 percent for one year. The primary difference is how they would pay for the freeze.

Senate Democrats would offset the estimated $6 billion cost by eliminating a tax provision that allows some small businesses, classified as S corporations, to avoid certain payroll taxes. House Democrats offered a bill that would pay for the freeze by cutting subsidies to oil companies. Republicans in both chambers responded with measures that cut a fund included in the Affordable Care Act (popularly known as Obamacare) that helps prevent chronic diseases. The House this afternoon passed the GOP measure (H.R. 4628) by a vote of 215-195. However, the White House this morning issued a Statement of Administration Policy threatening a veto.

We strongly support maintaining the present rate, and as long as Congress does not raid other education programs to offset the cost, we are open to how they pay for it. We sent this letter of support to the House yesterday in anticipation of today's vote. We will send a similar version of this letter to the Senate early next week.

President Obama issued an executive order today designed to ensure service members, veterans and dependents considering higher education have the information they need to make good decisions and are protected from deceptive recruiting practices by institutions only interested in students for the federal funds they bring in.

The executive order, signed at an event today at Fort Stewart in Georgia, includes the following provisions:

  • Colleges must provide more transparent information about student outcomes such as graduation rates, financial aid options and key documents, institutional performance over time and consumer protection.
  • The Department of Defense (DoD), the Department of Veterans Affairs (VA) and the Education Department (ED) must develop improved student outcome measures, such as completion rates for veterans, and a plan for collecting this data, which will be made available on ED’s College Navigator website.
  • The “Know Before You Owe” financial aid form, developed by the Consumer Financial Protection Bureau (CFPB) and ED, must be made available to every college student who participates in DoD’s Tuition Assistance program.
  • DoD will be required to set rules for how educational institutions gain access to military installations so service members are not targeted by institutions with a history of poor behavior in recruiting and marketing practices.
  • VA must trademark the term “GI Bill” so external websites and programs cannot use the term to deceptively or fraudulently market educational services to program beneficiaries.
  • VA, DoD and ED, in consultation with the CFPB and Department of Justice, must create a centralized complaint system for students receiving military and veterans’ educational benefits.

We strongly support providing student veterans with the appropriate information to protect them from the unethical behavior of a small number of institutions. However, we will need to study this order in detail to ensure it supports veterans to the fullest extent possible without making unnecessary regulatory demands on colleges and universities.

The Senate voted 68-31 yesterday to reauthorize the Violence Against Women Act, but the House is likely to pass a different version because of contentious provisions on immigration and new gay rights protections.

We have been monitoring this legislation because of a provision that could mean a significant expansion of the Clery Act, which requires colleges and universities to keep records and report annually on the nature, date, time and place of crimes occurring on campus.

The main focus of the bill is on federal programs to prevent domestic violence and rape. However, it also includes a provision that would require institutions to track and report claims of dating violence and stalking on campus. While we strongly support the intent of these provisions, we believe the bill in its current form would make Clery compliance more challenging while not meaningfully improving campus safety.

Attention now shifts to the House, where a group of Republican women have introduced an alternative version.

Molly Corbett Broad
President of ACE