Penn Hill Group’s Washington Wrap-Up: July 3

Here’s a quick look at the news from last week (June 25-29) in Washington.

The Department of Education announced the approval of five ESEA state waivers from the second round of waiver applications – Arkansas, Missouri, South Dakota, Utah and Virginia. In total, twenty four states have been granted ESEA waivers, and thirteen additional applications are still under review.

The Department of Education released Gainful Employment data last week, showing that five percent of career training programs (193 programs at 93 institutions) are not meeting the minimum standards for student success after graduation prescribed in the Gainful Employment regulation. If these programs fail to make the Gainful Employment standards in three out of four years, they risk losing eligibility for federal financial aid.

Iowa became the first state to be turned down for an ESEA waiver by the Department of Education.  In a letter to Iowa’s state education agency, the Department said that according to the Iowa waiver request,  the state does not have the authority to require that teachers and principal evaluations be determined in part by student outcomes.

Congress passed the “Temporary Surface Transportation Extension Act of 2012” last Friday afternoon. The bill includes a provision to extend the student loan interest rate reduction through 2013. The bill was approved by the House 373-52, and the Senate vote was 74-19. The President is expected to sign the bill.  Congressional leaders agreed to the deal on the student loan interest rate earlier this week– the projected cost of the delay in student loan interest rates is $6 billion (over 10 years).  Offsets that are being used to pay for this cost include an increase in the fees which businesses pay to the Pension Benefit Guaranty Corporation to insure underfunded pension plans, and the 150% credit accumulation rule proposed as part of the Obama Administration’s 2013 Budget.  This proposal would require, for students that are at 150% of credit accumulation of their program of study, that interest on any subsidized student loans begin to accrue interest while a student is in school.  For example, a student who is at 90 credits (for an AA degree requiring 60 credits) but has not yet met the requirements to receive an AA degree would have interest accrue on their subsidized student loans even though they are still  in school.

The House Labor, HHS, Education Subcommittee is still working toward marking up FY 2013 appropriations legislation in the near future.