Member Advisory

May 22, 2012

Government Relations Update

There are several important pieces of legislation the HACU GR staff has been working on that have seen significant movement this month, bills that will have a substantial impact on member-institutions. Although we are monitoring several important reauthorizations, we have limited this advisory to include only those that have seen action in the past two weeks.

Comprehensive Immigration Reform (CIR): On May 21, the Senate Judiciary Committee passed their version of the CIR bill after two weeks of amendments and hearings. The bill includes several key changes that HACU worked on and would be of benefit to HSIs should they be included in the final version of the bill. We have also been meeting with House members regarding their CIR proposal, which is expected to be released within the next couple of weeks, and there is confidence it will include similar language.

The committee passed Hirono amendment #21, which would allow DREAMers and Blue Card holders to qualify for federal loans, work study and services under the Higher Education Act; Pell was taken out because of the high cost. The committee also passed Coons amendment #10, which would allow all individuals authorized to work access to professional, commercial, and business licenses; this approach would effectively prevent anti-immigrant states and localities from denying professional licenses (like teaching certificates and medical and nursing licenses) and small business permits to many immigrants.

In addition, the Committee approved Hatch amendment #9, which would create several programs to improve STEM education at Minority Serving Institutions and at the K-12 level. If authorized, S. 744 would provide funding to help MSIs create and improve their STEM programs. The language increases certain fees and puts the money into a STEM fund. Twenty percent of the funds would go to the Department of Education to run STEM Capacity Building Programs at MSIs.

Student Loans Interest Rate Cliff: This week the House Committee on Education and the Workforce and the full House considered the Smarter Solutions for Students Act (HR 1911) to address the looming student loan cliff this summer. On July 1, the interest rate for federal subsidized student loans is scheduled to jump from 3.4% to 6.8%. Unless Congress acts, this increase will negatively impact millions of students and their ability to finance postsecondary education. In recent weeks, a number of proposals have been put forward to address the pending interest rate hike.

The Smarter Solutions for Students Act (H.R. 1911) would move all federal student loans (except Perkins loans) to a market-based interest rate. This proposal:

• Calculates subsidized and unsubsidized Stafford loans using a formula based on the 10-year Treasury Note plus 2.5 percent.
• Calculates graduate and parent PLUS loans using a formula based on the 10-year Treasury Note plus 4.5 percent.
• Resets student loan interest rates once a year, allowing rates to move with the free market and ensuring borrowers can take advantage of lower interest rates when available.
• Protects borrowers in high interest rate environments by including an 8.5 percent cap on Stafford Loan interest rates and a 10.5 percent cap on PLUS loans.
• Provides stability for low- and middle-income students working to finance their postsecondary education, and prevents future uncertainty about whether Congress is going to act in time to change the interest rate.
  

HACU will continue to provide updates as these and other major reauthorizations like the Farm Bill, ESEA and HEA, move forward.