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

White House Expands Student Loan Income-Based Repayment Program

June 9-13, 2014 ~ Vol. 15, No. 20

  • White House Expands Student Loan Income-Based Repayment Program; Warren Student Loan Bill Stalls in Senate
  • ACE Hosts Second Meeting of the Task Force on Federal Regulation of Higher Education
  • IN BRIEF: Senate Appropriations Subcommittee Marks Up Education Bill; Appeals Court Rules on HathiTrust; Senate Vets Bill Includes In-state Tuition Provision; House Resolution Criticizes Obama Ratings Plan

The major higher education news this week out of Washington comes from the White House—President Obama announced a series of executive actions Monday on federal student loans, including a memorandum directing the expansion of the Pay As You Earn program, which caps borrowers' loan payments at 10 percent of their income.

By December 2015, Pay As You Earn will be expanded to make several million more Americans eligible for this option. As you may know, the program currently is not available to students with older loans.

The president's plan also calls for the Department of Education to give additional financial incentives to companies that service federal loans to help borrowers avoid delinquency or default. The Education and Treasury departments will work with the nation’s largest tax-preparation firms to help ensure that borrowers are aware of student loan repayment options and higher education tax credits.

While this is a valuable step, it does have some limitations. More far-reaching steps to lower the cost of student loans and improve repayment options will require action by both Congress and the administration.

Unfortunately, an initial effort to do just that failed this week, as the Senate did not move forward on Sen. Elizabeth Warren’s (D-MA) bill, the Bank on Students Emergency Loan Refinancing Act (S. 2292). This measure would have allowed individuals with student loan debt to refinance their federal and private student loans at the rates set by Congress last year for new borrowers. ACE and 11 higher education associations sent a letter of support for the bill Monday to Sen. Warren.

However, this is not the last we’ve heard from Congress on this issue. Sen. Tom Harkin (D-IA) Wednesday called the vote on the refinancing bill “only a first step," and noted the upcoming reauthorization of the Higher Education Act will present another opportunity “to stand up for college affordability and accountability and help borrowers with existing student debt.”

We hosted the second meeting of the Task Force on Federal Regulation of Higher Education last Friday here at ACE. The group had its first opportunity to discuss input from the broader higher education community on burdensome regulations to review, after ACE issued a request for suggestions in February.

With the participation of guest speaker Susan Dudley, former administrator of the Office of Information and Regulatory Affairs, the task force also had a very productive discussion about the federal regulatory process and ways to possibly improve the rulemaking process at the Department of Education.

The next meeting of the task force is scheduled for November. We will continue to engage with its members and other experts in higher education to further refine both the specific regulations that need to be addressed and the ways in which the regulatory process at the Department of Education can be improved as a whole.

IN BRIEF

In what became a step forward followed by a pause, the Senate Appropriations Labor-Health and Human Services-Education Subcommittee Tuesday marked up its FY 2015 appropriations bill. The measure would raise the maximum Pell Grant award by an estimated $100, to $5,830. The bill also would increase funding for several campus-based student aid programs and includes $75 million for the president’s First in the World initiative, with $20 million set aside for minority-serving institutions. However, the bill's future is uncertain after the surprise cancellation of the full committee markup, originally scheduled for the day after the subcommittee markup. It is possible this measure will be stalled until after the November election.

The U.S. Court of Appeals for the Second Circuit ruled Tuesday in the case Authors Guild v. HathiTrust Digital Library, finding that the database is ‘‘quintessentially transformative use’’ of a copyrighted work and therefore books can be copied and stored electronically without the permission of authors and publishers. ACE submitted a brief last year in the case, in which the Authors Guild charged that HathiTrust was violating copyright laws by making some of its members’ work freely available. In addition to creating an unprecedented resource for scholarly research, one of HathiTrust’s goals is to create a digital archive accessible to persons with print disabilities. The appeals court decision also addressed this aspect of the archive, ruling that it is permissible to distribute the books in alternative forms to people with disabilities. The decision reflects our brief’s contention that HathiTrust is a critical addition to higher education’s resources and is a permitted fair use under copyright laws.

The Senate approved the Veterans' Access to Care through Choice, Accountability and Transparency Act (S. 2450) Wednesday night by a vote of 93-3. The bill is aimed primarily at improving veterans’ access to health care and addressing serious scheduling problems facing the Department of Veterans Affairs that have been widely discussed in the media. But it also includes a provision requiring public institutions to charge all veterans, regardless of their actual residence, no more than the in-state tuition rate, for a period of three years post-discharge, in order for those institutions to remain eligible for Post-9/11 GI and Montgomery GI Bill benefits.

Congressmen Bob Goodlatte (R-VA) and Michael Capuano (D-MA) introduced a resolution Tuesday to oppose the president’s proposal to create a college ratings system. In a statement, Rep. Goodlatte said, “I have spoken with a number of college and university presidents who are concerned about the negative impact this proposal may have on higher education, and I share their concerns. The resolution introduced today strongly supports the quality and value of diversity in our higher education system and makes clear that the administration’s proposed college ratings system is not feasible and if attempted, would decrease choice, diversity, and innovation.”

Molly Corbett Broad
President of ACE