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Congress hammers out budget compromise

December 22, 2013

U.S. CapitolIn Washington, D.C. …

FY 2014 Bi-Partisan Budget Compromise Bill

The Senate passed the bipartisan budget compromise bill that was approved by the House last week by a vote of 64 to 36, with nine Republicans joining all 55 Democrats in voting for the bill.

Now, Senate Appropriations Committee Chair Barbara Mikulski (D-Md.) and House Appropriations Committee Chair Harold Rogers (R-Ky.) will begin negotiations on how to divide the $1.012 trillion among the 12 appropriations bills. After those allocations are made, House and Senate appropriators will begin writing the individual spending bills over the holiday recess. Floor action on those bills, which may be combined into a single omnibus bill or a series of mini-omnibus bills, will most likely occur in early January when Congress reconvenes.

The bill(s) will need to be completed prior to Jan. 15, 2014, when the current Continuing Resolution expires. Only after those bills are passed will educators/advocates have a clear understanding of the funding levels for programs of interest to higher education.

The Senate also approved the annual National Defense Authorization Act, passed as a bipartisan compromise by the House last week, by a vote of 84-15. President Obama has indicated that he will sign this bill before he leaves for a two week holiday.

U.S. Department of Education

On Dec. 13, the final rule-making session on the Department of Education’s “gainful employment” regulations ended with a stalemate. A panel of department-appointed negotiators was unable to reach consensus on the proposed standards for vocational programs at for-profit institutions and community colleges. The department will now submit its own final draft of the regulations for a public comment period.

That same day, the department announced that the federal government will now recognize all legal same-sex marriages for the purpose of applying for and receiving federal student financial aid. This guidance impacts all questions concerning marriage and marital status on the FAFSA.

Higher Education Legislation

Money-tower-with-diploma[1]On Dec. 11, Sen. Dick Durbin (D-Ill.), joined by Sens. Elizabeth Warren (D-Mass.), Barbara Boxer (D-Calif.) and Jack Reed (D-R.I.), introduced S.1803, the Student Loan Borrower Bill of Rights. This bill is intended to ensure that struggling student loan borrowers are treated fairly and understand the full range of repayment options and resources available to them.

The bill provides six basic rights for all federal and private student loan borrowers:

  • The right to have options, such as alternative payment plans, to avoid default.
  • The right to be informed about key terms and conditions of the loan and any repayment options to ensure changing plans will not cost more.
  • The right to know the loan’s servicer and who to reach out to when there is a problem.
  • The right to consistency when it comes to how monthly payments are applied. Lenders and servicers also should honor promotions and promises that are advertised or offered.
  • The right to fairness, such as grace periods when loans are transferred or debt cancellation when the borrower dies or becomes disabled.
  • The right to accountability, including timely resolution of errors and certification of private loans.

The bill places a special focus on service member and veteran borrowers by requiring loan servicers to provide each borrower with a liaison specifically trained in the benefits available to military borrowers.

As Congress leaves town for the year, every major piece of education legislation – from the Elementary and Secondary Education Act to the Higher Education Act to the Education Sciences Reform Act to vocation education – is still pending.

President Obama’s College Rating Plan

A recent Gallup poll of college and university presidents found that most college presidents doubt that President Obama’s plan to promote affordable higher education will be effective or that it will lead students to make better informed choices.

They expect that the wealthiest colleges and universities will be the most successful in the ratings system the president has proposed. Only 2 percent of the presidents said that the president’s plan will be “very effective” at making higher education affordable, only 19 percent think that it will have a positive impact on their institution, and majorities question the use of some of the criteria proposed in the ratings plan.

Seal of the State of IllinoisIn Springfield …

Shortly after the General Assembly passed its pension reform legislation, all three of the United States’ major bond rating agencies have weighed in: All three agencies left Illinois’ credit rating unchanged, although Standard and Poor’s modified Illinois’ outlook from “negative” to “developing.”

Both Moody’s and Fitch retained a “negative” outlook, meaning that they expect that Illinois could see further downgrades in the future. The agencies praised the state for finally tackling the pension issue, but tempered their enthusiasm by reserving final judgment until a formal financial assessment can be completed.

The agencies cautioned that an expected lawsuit could reserve the gains and warmed that the state’s pension underfunding is only a symptom of deeper financial mismanagement issues.

No new legislation of interest to higher education was introduced in recent days.