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Student Loan Bills Stall in Senate; Republican Leadership Proposes New Offsets

June 1, 2012—House and Senate Republicans May 31 sent a letter to President Obama proposing new offsets to avert a July 1 increase of undergraduate subsidized loan interest rates from 3.4 percent to 6.8 percent. The letter, sent by House Speaker John Boehner (Ohio), Senate Republican Leader Mitch McConnell (Ky.), House Majority Leader Eric Cantor (Va.), and Senate Republican Whip Jon Kyl (Ariz.), outlines two options based on “areas of common agreement” within the president’s FY 2013 budget request. Of note, the second option includes the president’s proposal to phase down the allowable Medicaid provider tax threshold from 6.0 percent to 3.5 percent.

The Senate May 24 rejected two bills that would have would have extended the lower interest rate until July 1, 2013 [see Washington Highlights, April 27]. The Democratic Senate bill (H.R. 4628) offset the cost of the extension by raising taxes on so-called “S” corporations, while the Republican House proposal (S.2343) would have repealed the Prevention and Public Health Fund established under the Affordable Care Act (ACA, P.L., 111-148 and P.L. 111-152).

Republican presidential candidate and former Massachusetts Governor Mitt Romney May 24 released a national education plan as part of his campaign platform.  The education plan paints a picture of a simpler system without redundant scholarships, loans, and repayment options that are “needlessly complex.”  In the proposal, Gov. Romney indicates that he would revise or reverse two major Obama administration initiatives: elimination of the bank-based Federal Family Education Loan (FFEL) Program and tighter regulations on for-profit colleges, particularly the “gainful employment” rule.

Gov. Romney’s education plan is also supportive of federal funding for scientific research at higher education institutions. The plan notes, “The long-term federal investment in basic research within institutions of higher learning has been a crucial engine for innovation in our economy, and one that could not be replicated through other sources of funding,” and a “Romney Administration will maintain a strong commitment to research in the physical, biological, and social sciences and to ensure that the priorities for research funding are not hijacked by short-term political imperatives.”


Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
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Telephone: 202-903-0806