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Policy Update-May 14, 2012

Minnesota Legislative Session comes to an end

Last week the Minnesota House of Representatives and Senate adjourned the 2013 legislative session. The final bonding bill was passed and signed by Governor Mark Dayton. This legislation provides funding for Minnesota State Colleges and Universities (MnSCU) infrastructure projects. In total, the MnSCU system was allotted $132 million with $94.7 million in state funding. Of this amount, $20 million was set aside for Higher Education Asset Preservation and Replacement (HEAPR) funding.

Federal government addresses Stafford Loan interest rate increases

On Monday May 7, student leaders and elected officials around the country joined the White House on a conference call to address the Stafford Loan interest rate issue before the vote in the Senate. Saint Paul Mayor Chris Coleman hosted the call with Minnesota student leaders, including MSCSA President Geoff Dittberner. President Obama spoke with students about ways to prevent the doubling of interest rates. President Obama has threatened to veto the Interest Rate Reduction Act that passed the House because the money to pay for it would come from the Prevention and Public Health Fund (see below).

MSCSA President Dittberner had this to say about the conference call: "I want to thank Mayor Chris Coleman for the opportunity to join him, students, college presidents and lawmakers across the country in voicing our support for more affordable education. Additionally, I am appreciative of President Obama and his administration for hosting the call, reaffirming their support to keep Stafford Loan interest rates low, and the President’s work on increasing Pell grant awards. He has been a leader in highlighting the role of our two-year colleges to the national economic recovery."

On Tuesday May 8, the Senate voted on legislation to prevent the interest rate increases on subsidized Stafford Loans from 3.4% to 6.8%.  The rate increase is set to take effect on July 1, unless action is taken. The Senate legislation would pay for the rate increases by eliminating some tax loopholes for corporations. 

Both Minnesota Senators Amy Klobuchar and Al Franken spoke in support of the bill on the Senate floor. Senator Franken shared the story of Hennepin Technical College-Eden Prairie student Michael Flannery to illustrate the impact these rate hikes will have on students who are struggling with the high cost of college.  To debate this issue, 60 votes were needed. The final vote was 52 to 45. Click here to read about the Senate vote and watch Sen. Klobuchar and Franken's speeches.

The Senate bill followed the passage of the Interest Rate Reduction Act in the House of Representatives on Friday, April 27. To pay for the lost revenue in keeping rates at 3.4%, the House bill takes funding from the Prevention and Public Health Fund that was created in the Affordable Care Act.

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