Monthly Archives: December 2010

National Debt Commission Takes Vote on Proposal

Posted on by

On Friday, the bipartisan National Commission on Fiscal Responsibility and Reform voted on the final proposal released earlier last week.

The proposal received 11 of 18 votes in favor of the final plan which would reduce the deficit by  nearly $4 trillion over the next decade.

Though this is too few votes to command quick action in Congress, it does constitute more votes in favor of the plan than was expected.

The Commission’s final report proposed ideas and solutions to bring the federal budget into primary balance in 2015 and improve the long-run fiscal outlook.

The Commission recommended that a cap on discretionary spending be put into place through 2020. Higher education would be impacted by this cap. The intention of this recommendation was to hold spending to 2012 or lower than 2011 spending levels and return spending to precrisis 2008 levels in real terms in 2013. In addition, the recommendation limits spending growth to half the projected inflation rate through 2020.

Another recommendation by the Commission was to eliminate the in-school interest subsidy on federal loans. This would allow for the elimination of income-based subsidies for federal student loan borrowers and better target hardship relief for loan repayment.

Federal FY 2010 Budget Extended; FY 2011 A Question Mark

Posted on by
Reply

Last week, the U.S. House and Senate passed a Continuing Resolution (CR) that extends the FY 2010 budget until December 18. The original Continuing Resolution expired on December 3.

Both the House and Senate ,the 12 appropriations bills they must now close the budget process through either an omnibus spending bill, which combines all 12 bills in to one, or through yet another CR.

Many speculate that the House will pass a CR that will extend throughout the entire FY2011. The scenario in the Senate is a little less clear. There appears to be some support for an omnibus bill, though it may not be able to garner enough votes for passage. If the Senate does not pass an omnibus bill they could pass a year-long CR, or another temporary CR extending only through the early part of the year. The latter would allow the new Congress to address the issue.

New Version of DREAM Act Introduced in U.S. Senate

Posted on by

A new version of the Development Relief and Education for Alien Minors (DREAM) Act (S. 3992) was introcuced by U.S. Senator Harry Reid.

S. 3992 would authorize the Secretary of Homeland Security to grant conditional nonimmigrant status to undocumented students who were brought to this country before the age of 16, have been here at least five years as of the enactment date, and are under 30 years of age. After 10 years, individuals could have their status adjusted from conditional nonimmigrant to legal permanent resident status if they have received a degree from an institution of higher education, completed at least two years toward a bachelor’s (or higher)degree, or served at least two years in the military.

Key provisions in the bill include:

  • Increasing the conditional nonimmigrant status from six to ten years
  • Lowering the age requirement, so only those younger than 30 are eligible
  • Expanding the definition of “institution of higher learning” to include vocational institutions
  • Requiring the children to be brought to the U.S. before the age of 16 and live here at least five years when the legislation is enacted into law
  • Requiring a U.S. high school diploma or GED credential

A vote on S. 3992 coud come as early as next week in the Senate. It is unknown if the House will introduce and vote on its own version of the bill or take up the Senate’s version.

Higher Education Act 2013 Renewal on Agenda

Posted on by

This week U.S. Secretary of Education Arne Duncan convened a subcommittee of the Department’s National Advisorty Committee on Institutional Quality and Integrity to develop a set of legislative recommendations for the 2013 renewal of the Higher Education Act.

The subcommittee plans to make recommendations regarding the nation’as decentralized system of accreditation as well as on non-accreditation issues.

Susan Phillips, Provost and Vice President for Academic Affairs at State University of New York Albany, Chair of the subcommittee, framed the charge of the subcommittee in an outline. The outline targets several key issues facing higher education:

  • How well does the federal investment in education serve the nation?
  • How well does the current accreditation/recognition system protect the interests of the taxpayer who is underwriting the investment in education?
  • If we began today, we would design the current system?

The subcommittee plans to host a policy forum in February 2011 to seek input from the public. The goal is to have a set of recommendations to the Secretary by December 2011.

In addition to Chair Phillips the subcommittee includes:

  • Arthur E. Keiser, chancellor of the Kesier Collegiate System
  • William E. (Brit) Kirwan, chancellor of the University System of Maryland
  • Daniel J. Klaich, chancellor and chief operating officer of the Nevada System of Higher Education
  • Anne D. Neal, president of the American Council of Trustees and Alumni
  • William Pepicello, provost and president of the University of Phoenix
  • Jamienne S. Studley, president and CEO of Public Advocates, Inc.
  • Ex officio: Cameron C. Staples, member of the Connecticut House of Representative
  • Ex officio: Arthur J. Rothkopf, president emeritus Lafayette College

Recounts Go to Republican Candidates

Posted on by

This week the Washington Secretary of State completed recounts in three state legislative races.

Republican Challenger Steve Litzow (District 41) prevailed by 192 votes in the machine recount of his race against Democratic State Sen. Randy Gordon.

In the 25th Legislative District Republican Hans Zeiger (District 42) defeated Rep. Dawn Morrell, the House Democratic Caucus Chairwoman, by 30 votes.

Finally, Republican Vincent Buys defeated Democrat Representative Kelli Linville.

None of the outcomes change the majorities in either the House or Senate.

New Legislation Looks at Requirements to Private Loans After Death of a Student

Posted on by

This week, U.S. Senator Lautenberg introduced legislation  to require lenders to make clear the obligations of co-signers in the event of a student’s death.

The Christopher Bryski Student Loan Protection Act is the culmination of a multi-year battle fought by the Bryski family. In July 2006, Christopher Bryski died at the age of 25. Today, his parents continue to make monthly payments on the $44,500 in private student loans that Mr. Bryski took out to attend Rutgers University.

The Act introduced this week would require lenders to provide students and parents with more information about what happens to loans in the event of death.

Federal student loans can generally be discharged if a student dies or becomes permanently disabled, however, private student lenders  are not required to discharge loans in the event of death or disability, leaving co-signers, typically parents, on the hook for the balance.

The House passed its version of the bill in September, and the nearly-identical Senate version, which does not have funding attached, is also expected to pass, according to people familiar with the legislation. A compromise between lawmakers and industry groups, the current version would not require lenders to discharge private student loans. However, it would require all private lenders, to define the obligations of the co-signer, typically a parent, in the event of the student’s death or disability, and to provide information on power of attorney.

The Senate version of the bill designates the new Consumer Financial Protection Bureau as the agency responsible for handling the issue. Final approval will be needed in the House after Senate passage before it can be signed into law.

Republicans and House Democrats Release Proposals to Balance Budget

Posted on by

Yesterday, both the House and Senate Republicans and the House Democrats issued their proposals to balance the $1.2 billion shortfall in the current fiscal year.

Both proposals come on the heels of a detailed list issued by the Governor. Senate Democrats have yet to issue a proposal to balance the current budget shortfall.

House Republicans

Rep. Gary Alexander, current Ranking Minority Leader on the House Ways & Means Committee, issued a letter outlining a general framework for balancing the current budget. 

The House Republicans agree with many of the suggestions the Governor put forth in her proposed list of reductions. In addition, the House Republicans suggested items not included on the Governor’s proposed list, including suspension of all-day kindergarten and redefining the Temporary Assistance for Needy Families program.

The letter also noted areas of disagreement between the House Republicans and the Governor. Rep. Alexander spoke to concerns regarding retroactive actions on moneys already spent and the use of delaying payments to balance the budget.

Finally, the House Republicans offered a compromise with regard to employee health care benefits, suggesting a graduated ratio based on income. The proposal would begin with 14% and end with 26%, with the median around the 20% mark beginning in January. The Governor proposed a shift from a ratio of 74 state to 26 employees.

Senate Republicans

Senate Republicans issued a much more detailed list of proposals to balance the current budget shortfall.  The list of proposals range from redirecting revenue streams to the General Fund to reductions to all state agency budgets to reductions in state and higher education employee salaries.

With regard to higher education, the Senate Republican proposal:

  • Supports the Maintenance of Effort requirement for higher education
  • Calls for examination of non-state need grant and work study financial assistance programs
  • Reduces tuition waiver authority

House Democrats

Speaker Chopp and Representative Sullivan (Majority Leader-Elect) issued a preliminary 
list of reduction ideas. The list put forth by the  House Democrats does not include some of the proposed reductions put forth by Governor Gregoire, such as elimination of the Basic Health Plan and reductions to Levy Equalization.

With regard to higher education, the House Democrat proposal suggests:

  • Reductions to state financial aid programs, with the intent to minimize impact to students
  • Supports the Maintenance of Effort requirement for higher education

National Debt Commission Releases Final Report

Posted on by

Today, the bipartisan National Commission on Fiscal Responsibility and Reform released their final report, The Moment of Truth.

The report proposes ideas and solutions to bring the federal budget into primary balance in 2015 and improve the long-run fiscal outlook.

The Commission recommends that a cap on discretionary spending be put into place thorugh 2020. Higher education would be impacted by this cap. The intention of this recommendation is to hold spending to 2012 or lower than 2011 spending levels and return spending to precrisis 2008 levels in real terms in 2013. In addition, the recommendation limits spending growth to half the projected inflation rate through 2020.

Another recommendation by the Commission is to eliminate the in-school interest subsidy on federal loans. This would allow for the elimination of income-based subsidies for federal student loan borrowers and better target hardship relief for loan repayment.

A final vote on the report is expected tomorrow, Friday.

Special Session Still Possible

Posted on by

Yesterday, Governor Gregoire met with Democrat and Republican leaders from the House and Senate, but did not reach an agreement regarding a special session to deal with the looming $1.2 billion budget deficit in the current fiscal year.

Governor Gregoire would like action this month to balance the 2009-11 budget, but is hesistant to call in legislators without an agreement.  Legislative leadership still needs time to talk with their caucuses about proposals for reductions.

More meetings are planned with the Governor.

Legislative Committee Approves Higher Education Report

Posted on by

This morning the Washington Joint Legislative Audit & Review Committee (JLARC) adopted the final report, Transparency in Higher Education Data.

In 2009, the Legislature asked JLARC to explore the feasibility of linking expenditure, revenue, and performance information for the state’s public four-year institutions.

The report found that in general comparable revenue, expenditure and performance information is currently available for each of the six public four-year institutions.

The report identifies some gaps and offers suggestions for improvements to fiscal data collected in the state accounting system and performance data collected by the Higher Education Coordinating Board.

Mike Reilly, Executive Director for the Council of Presidents, testified to the value of considering the adoption and implementation of  the NGA initiative Compete to Complete. Compete to Complete  offers the state the opportunity to consolidate measures for higher education into a single framework.  The University of Washington also testified.

The final report was unanimously approved.