Policy Update: June 10, 2013
Below is an update of some of the big issues facing Northeastern in Washington, including student aid and research funding. Overall these are challenging times in Washington given the partisan divide.
Student Loan Interest Rates
Today, Senator Elizabeth Warren and Congressman John Tierney came to campus to highlight the issue of pending increases to student loan interest rates. President Aoun was on hand to praise the Senator and Congressman for their hard work on this critical issue for our students.
Unless Congress acts by July 1, student loan interest rates will double to 6.8 percent. On May 23, the U.S. House passed a bill along party lines that would provide a long-term fix to student loan interest rates, with rates pegged to the 10-year Treasury bond rate (H.R. 1911, S. 1003). Meanwhile the Democrats have proposed to retain the current 3.4-percent rate for two years, paid for by ending certain non-education tax benefits (S. 953). Their goal is to negotiate a longer-term fix as part of the reauthorization of the Higher Education Act.
Last week, Senate Democrats were unable to gain enough votes to pass the Student Loan Affordability Act of 2013 (S. 953), which would maintain the student loan interest rate on subsidized loans at 3.4 percent for two years.
Given how far apart both sides are, it is not clear yet if this issue will be resolved before the July 1 deadline.
Congress is now working to move the FY14 Appropriations bills, which fund the federal agencies. While the House is starting to pass some of these bill, the funding allocated to each of the subcommittees charged with drafting the bills is much lower than what their counterparts in the Senate are slated to work with. The House is working from a low discretionary spending level—$91 billion less than the figure being used by the Senate and $17 billion less than the post-sequester FY13 level—and Republican leaders have chosen to protect security-related bills from the impact of the sequester, the remaining eight FY14 spending bills are not expected to reach the House floor. This will mean that domestic programs - such as research funding agencies - will be cut in the House bills.
Even if the House bills were to pass, the President has threatened to veto them. The Senate bills will be much more generous, making it very unlikely that we will see final appropriations bills passed by both houses. We are much more likely to see another Continuing Resolution, which keeps federal agencies funded at current levels through FY 14.
Below are summaries of the two appropriations bills that passed last week and reflect the House’s intent to protect military and homeland security spending:
Military Construction-Veterans Affairs (H.R. 2216), which the House passed on June 4 by a vote of 421 to 4, would provide totaldiscretionary spending of $73.3 billion, or $2.4 billion above the post-sequester FY13 level. (Veterans Affairs programs were not affected by the sequester.)
Homeland Security (H. R. 2217), which the House passed on June 6 by a vote of 245 to 182, includes $38.9 billion in discretionary spending for the Department of Homeland Security (DHS). That is $981 million above the agency’s post-sequester FY13 funding level.
The House approved 224-201 an amendment to the FY14 Homeland Security appropriations bill, offered by Rep. Steve King (R-IA), that would prohibit the governmentfrom funding a 2012 White House order that has temporarily protected from deportation young undocumented immigrants who were brought to this country as children. These are the young people who would benefit from passage of the Development, Relief, and Education for Alien Minors (DREAM) Act.
The Senate Appropriations Committee has not announced a schedule for moving its FY14 funding bills, but is expected to begin soon. Appropriations Chairwoman Barbara Mikulski (D-MD) has said she plans to use the $1.06 trillion funding level for FY14 contained in theSenate-passed FY14 budget resolution. That level assumes repeal of the sequester.