Republican legislation that will provide loan consolidations for more than 80,000 college students and recent grads is headed for final passage this weekend. The legislation will relieve an enormous backlog of applications at the Clinton Administration's direct loan consolidation program.
On Friday, House and Senate authorizers reached an agreement with Conference appropriators to expedite action on H.R. 2535, "The Student Loan Consolidation Act. The consolidation of direct student loans has been put on hold by the Department of Education since its Federal Direct Consolidation Loan Program shut down on Aug. 26.
"Anyone who thinks that the U.S. Department of Education can efficiently and effectively service student loans, must also believe that the Internal Revenue Service is fair and friendly to American taxpayers," said Chairman Bill Goodling (R-PA). "It is unconscionable that a program designed to help young people has only hurt them."
"This Congressional action reflects the importance of helping the thousands of young people who have been left in a credit crunch because of the Department of Education's failure to properly manage its Direct Consolidation Loan Program," said Rep. Howard P. "Buck" McKeon, chairman of the Subcommittee on Postsecondary Education, Training and Lifelong Learning.
Under the agreement, H.R. 2535 will become a part of the Labor/HHS/Education Appropriations Bill (H.R. 2264) for the upcoming year. The Senate is expected to consider the Conference Report for the bill today. A similar bill had been reported out of the Senate's Committee on Labor and Human Resources, but has not been brought to the Senate floor.
The bill provides relief to students and college graduates by allowing them to exit Clinton's Direct Loan Program and consolidate their loans at private lending institutions.
Holders of student loans may wish to consolidate their loans in order to change their payment schedule or lower their monthly payments. Without the option for loan consolidation, some student borrowers will end up paying more interest on their loans. They may also experience additional time and convenience costs, or may have a hard time getting a mortgage because many mortgage lenders require refinancing of debt.
It provides relief by allowing direct loans to be consolidated into a Federal Family Education Loan (FFEL), which are administered by private lenders.
On Oct. 1, the House Committee on Education and the Workforce reported H.R. 2535 by a unanimous vote of 43-0. The bill, which was introduced by Rep. McKeon, is applicable to all loans made between the date of enactment and Oct. 1, 1998.
The Act will allow students to retain their interest subsidy benefits on all subsidized loans included in the consolidation loan as is currently allowed in the direct loan program but not the FFEL Program. It will also provide students with the interest rate currently applicable to direct consolidation loans: T-bill + 3.1% capped at 8.25% (the FFEL rate is the weighted average of the loans consolidated rounded up to the nearest whole percent).
May 22, 2001 - Selective Service Reports First Increase in Registration Following Years of Steady Decline - Agency Seeks to Overcome Challenge of Reaching Underrepresented Populations
The Selective Service System today announced its second annual report to the nation showing an overall 4-percent increase in state-by-state registration compliance rates for men born in 1981 who registered through calendar year 2000. This report followed several years of declining rates.
The Selective Service Progress Report showed that 87 percent of men turning 20 in calendar year 2000 who registered with Selective Service is up from last year's 83 percent of men born in 1980 who were registered in 1999. Numbers were up in almost every state, with some achieving an increase of as much as 8 percent.
"We are extremely excited because the registration compliance rate increase indicates that more young men are ensuring their futures by complying with the law and staying eligible for important benefits on the federal, state and local levels," said Selective Service Director of Public Affairs Lew Brodsky. "But we still have much work to do," he said. "Compliance is still too low in our inner cities and our southern border states, meaning that young men there risk losing out on a college education, good jobs, job training, and for immigrants, their chance to become U.S. citizens."
Federal law requires that virtually all young men living in the U.S. register with Selective Service within 30 days of their 18th birthday. The American people, through their local, state and federal elected representatives, have made Selective Service registration a requirement for securing a number of opportunities, including federal student loans, job training, government jobs, and U.S. citizenship for male immigrants. Twenty-nine states and 71 municipalities have similar laws tying education, training or employment opportunities for young men to Selective Service registration. Additionally, some states are making registration a requirement for men seeking driver's licenses. Failure to register is a felony punishable by up to five years in prison and a fine of up to $250,000.
"Our research shows that the biggest barrier to young men's compliance is simple lack of awareness," Brodsky said. "It is tragic to see young men potentially missing out on future opportunities because they just don't know that they are required to register. But even more tragic is that our experience shows the young men most likely to miss the message are the very men who may stand the most to gain from these opportunities."
Brodsky cautioned that more needs to be done to reach out to all young men. "We are challenged. More than 5,000 new young men turn 18 every day. We need extra assistance in reaching those men who are failing to register. I think this can be accomplished best through the assistance of the community-based partner organizations we have gathered here today."
Community-based partners offering their assistance to Selective Service include: Greater Washington Urban League, League of United Latin American Citizens, National Congress of American Indians, National Council of La Raza and Organization of Chinese Americans (representing Pan-Asian cultures).
"While we are encouraged by the increase in registration compliance, we realize that we have more work to do in informing young men of their requirement to register with Selective Service, and helping them fulfill their potential," Brodsky said. "We will be greatly assisted in our efforts by these partners who share the same dedication to empowering and inspiring our nation's youth."
"The partners that have gathered here today represent the beginning of what we intend to be a growing outreach effort over the next several years," Brodsky said. "With the support of these individuals and organizations, with our plans to increase our outreach into other communities, and with continuing efforts on the state, local, and national levels, we will ensure that all young men are aware of their responsibilities and benefit from all of the opportunities due them."