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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, May 21-25, 2012

Vol. 13, No. 17

  • ​Democratic, GOP Student Loan Interest Rate Freeze Bills Fail in Senate
  • Federal Appeals Court Issues Opinion in University Records Case
  • IN BRIEF: June 15 Webinar on Background Checks; Apply for ACE Internationalization Laboratory by June 30

Efforts to freeze subsidized Stafford student loan interest rates at 3.4 percent for the coming year stalemated in the Senate this week, as neither party could garner enough votes to advance their own version of the legislation. The outcome was largely known in advance, but both parties are trying to show the public their desire to keep the rate low.

Both parties want to keep the interest rate at 3.4 percent, but are deadlocked on how to pay for the $6 billion cost. Without the freeze, the rates will double to 6.8 percent on July 1, costing roughly 7 million borrowers about $1,000 each.

The Democrats pay for the freeze by eliminating a provision that allows some small businesses, classified as "S" corporations, to avoid some payroll taxes. The GOP eliminated a preventative health care fund in the Affordable Care Act. The same offset was used by the House of Representatives when it approved its interest rate freeze bill (H.R. 4628) on April 27. The White House has threatened to veto the House GOP measure.

But the Senate Democrats' bill (S. 2343) failed 51 to 43, falling short of the 60 needed. The Senate GOP version (S. 2366) also failed, 34 to 62.

Because both parties agree the interest rate should stay the same, a compromise on the issue of how to offset the cost ahead of the July 1 deadline seems likely. But the debate probably will continue on right up to the final hour.

The United States Court of Appeals for the Seventh Circuit issued an opinion Thursday in Chicago Tribune Co. v. Board of Trustees of the Univ. of Illinois, a case in which ACE submitted an amicus brief.

The Tribune sought records from the university regarding the admission of some students. The university denied the Tribune's request, made under state open records law, asserting that the records were protected by the federal Family Education Rights and Privacy Act of 1974 (FERPA)—and therefore were exempt from the state law. The federal district court ruled for the Tribune, but the Seventh Circuit ruled that the federal courts did not have jurisdiction at all in the case. The Seventh Circuit sent the case back to the federal district court, directing it to vacate its decision.

Because the Seventh Circuit did not rule on the merits of the case, it offered no clear guidance for institutions faced with a conflict between state open records laws and the requirements of FERPA. The ruling maintains the protections of the records of the public university, leaving the issue to be resolved in the state courts, where the Tribune still can pursue the university's records.


The National Association of College and University Attorneys, in cooperation with the American Council on Education, will present a webinar June 15 to review the Equal Employment Opportunity Commission's (EEOC) new guidance on the use of criminal and other background checks by employers and the risks and benefits these checks hold for colleges and universities. The registration fee is $265 per site location.

The deadline for institutions to apply to join the 10th cohort of ACE's Internationalization Laboratory is June 30. The cohort, a national learning community of institutions that explore global efforts on campus, will begin in August 2012. Over a 20-month period, participants will build leadership teams, analyze current activities and craft goals and strategic plans for their internationalization efforts. For more information, contact Barbara Hill, senior associate for internationalization, at

Molly Corbett Broad
President of ACE