Higher Ed Reauthorization
Heats Up; Debate Over Consolidation Continues
April 23, 2004 - The AAMC along with 24 other physician
groups April 19 sent a letter
(PDF, 3 pages - 79KB) to the chairs and ranking members
of the Senate Health, Education, Labor and Pensions Committee,
and the House Committee on Education and the Workforce, the
two committees of jurisdiction for the upcoming reauthorization
of the Higher Education Act, calling on Congress to increase
the annual Stafford subsidized loan limits and extend the
Economic Hardship Deferment. Meanwhile, the debate over whether
interest rates on consolidated federal student loans should
be fixed or variable continued this week as two prominent
legislators lobbied their colleagues on opposing sides of
the issue. Additionally, several Democratic Representatives
introduced a bill that calls for increased annual loan limits
for undergraduate and graduate subsidized loans, and variable
rate consolidation loans.
Specifically, the physician group letter calls on Congress
to increase subsidized Stafford loan limits for graduate and
professional students from the current $8,500 to at least
$12,000. Loan limits have not increased since 1992 and enacting
such a change would "help medical students choose a specialty
and practice location driven by their education, experiences,
and aspirations, rather than by the amounts of their educational
loan liabilities." The letter also calls for an extension
of the Economic Hardship Deferment to the length of a required
residency. The deferment is currently available for only three
years, less than the length of many residencies. The letter
also recommends that all school-certified education loans
be included in the calculation for determining eligibility
for the Economic Hardship Deferment.
House Education and the Workforce Committee Chairman John
Boehner (R-Ohio) April 19 circulated a "Dear Colleague"
letter to his House colleagues arguing that "the ballooning
cost of fixed-rate consolidation loans is a direct threat
to college access for low and middle-income students - the
students who should be our first priority as Congress reauthorizes
the Higher Education Act." The same day, the Committee's
Ranking Member, George Miller (D-Calif.), circulated his own
"Dear Colleague" letter in support of maintaining
the fixed rate for consolidation loans. He states "Now
is not the time to deprive students of the low fixed rates
which we previously agreed to and increase their loan burdens.
Instead, we need to re-examine the level of subsidies that
we provide to banks and determine how best to provide assistance
to low and middle-income students as part of any consideration
on how to address the potential future costs of the program."
Education and the Workforce Committee member Rob Andrews
(D-N.J.) April 1 introduced the "Access and Equity in
Higher Education Act" (H.R. 4102). Of particular interest
to medical schools and teaching hospitals are provisions in
the bill to increase the annual subsidized Stafford loan limit
for graduate and professional students from $8,500 to $10,000.
Although the aggregate limits are reduced from $65,500 to
$60,000, undergraduate loans are excluded from the aggregate
total. The legislation would also increase annual unsubsidized
loan limits for graduate and professional students, eliminating
the $10,000 limit in favor of a limit of $25,000 minus the
level of subsidized loans. The legislation does not address
the additional unsubsidized limits available to health professions
students. H.R. 4102 would also replace the current fixed rate
structure for federal consolidation loans, establishing a
variable rate of the 91-day Treasury bill plus 2.3 percent
for consolidation loans, but offering lower rates for individuals
whose loan payments would exceed a certain percentage of the
individual's monthly income. Republican committee members
are expected to introduce their proposal for reauthorizing
the loan provisions of the Higher Education Act in the near
future.
Information:
Jonathan Fishburn, Director, Research, Education and Veterans' Legislative Affairs
AAMC Government Relations
jfishburn@aamc.org
(202) 828-0525
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