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Senate Blocks Student Loan Bills; AAMC Comments on Gainful Employment Regulation

June 7, 2013—Mostly along party lines, the Senate June 6 failed to muster the 60 votes needed to consider two separate pieces of legislation designed to avert the scheduled doubling of subsidized Stafford loan interest rates for undergraduate students. 

The first measure (S. 1003), sponsored by Sen. Tom Coburn (R-Okla.), Sen. Richard Burr (R-N.C.), and Senate Health Education, Labor, and Pensions Committee Chair Lamar Alexander (R-Tenn.), would establish fixed interest rates for all Stafford loans (including GradPLUS loans) based on the 10-year Treasury rate plus 3 percentage points.

The second measure, the Student Loan Affordability Act (S. 953), is supported by Senate Democrats and would extend current interest rates for two years, in expectation that the issue could be addressed during the upcoming reauthorization of the Higher Education Act [see Washington Highlights, May 24]. Under this plan, subsidized Stafford and GradPLUS interest rates would remain fixed at 6.8 and 7.9 percent, respectively.

The White House issued a June 4 Statement of Administration Policy (SAP) supporting S. 953, in contrast to the May 22 SAP threatening to veto the Smarter Solutions for Students Act (H.R. 1911), which the House passed May 23.

Meanwhile, the AAMC and the Association of American Colleges of Osteopathic Medicine (AACOM) submitted a June 4 letter  to the Secretary of Education Arne Duncan in response to a Department of Education call for public comments.  The letter asks the Department “in examining gainful employment and student loan repayment, [to] take into consideration the factors unique to medical education.” 

It further cautions that if previously proposed gainful employment regulations are “applied to the non-profit as well as for-profit U.S. medical schools, potentially all institutions would be deemed ineligible for Title IV student financial aid programs.”


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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