A r c h i v e d  I n f o r m a t i o n
Archives of Information on Priorities of Previous Administrations

9/25/98

The Higher Education Act (HEA) Reauthorization includes a number of Clinton Administration initiatives that will increase access to college, make higher education more affordable, and improve teacher quality. We understand that the conference agreement:

Saves $11 billion for students by slashing the student loan interest rate from 8.25% to 7.46%:

• Extends for 5 years the low student interest rate on new loans, first won in the 1993 budget, proposed again in February by Vice President Gore, and available since July 1. The typical student borrower at a 4-year college, who graduates with $13,000 in debt, will save about $700 over a ten-year repayment period.

• Allows borrowers to refinance outstanding loans at the lower rate by extending for four months the current 7.46% interest rate on Direct Consolidation Loans. After four months, the consolidation rate in both loan programs will rise to the average rate of the underlying loans, weighted by loan size and capped at 8.25%.

Launches a new national effort to help disadvantaged students prepare for college:

• Provides competitive grants to States and to local partnerships, based on the Administration's High Hopes for College proposal to challenge colleges to partner with middle schools in high-poverty areas to ensure that students receive financial aid information, rigorous courses, tutoring, mentoring and scholarships for college.

Improves teacher quality, preparation, and recruitment:

• Improves teacher preparation through grants to partnerships -- modeled after the Administration's proposed Lighthouse Partnerships -- between teacher education institutions and school districts to produce teachers who have strong teaching skills, are highly competent in the academic content areas in which they plan to teach, and know how to use technology as a tool for teaching and learning.

• Recruits additional teachers for high-need areas through the Administration's proposed grants to partnerships between high-quality teacher education programs and local schools to offer scholarships, support, and services to recruit and prepare teachers to serve for at least three years in high-need schools.

• Supports state-level efforts to improve teacher quality through State Teacher Quality Enhancement grants to strengthen state teacher certification standards, create alternative pathways into teaching, hold higher education institutions accountable for the quality of teachers they prepare, and recruit high-quality teachers.

• Strengthens accountability in teacher education by requiring that states and teacher education institutions report on teacher preparation, including their students' performance on teacher licensing exams.

Promotes high quality distance education efforts:

• Expands student aid eligibility for distance learners, a goal proposed by the Administration, through demonstration programs that waive some student aid restrictions to allow more nontraditional students to obtain higher education, including full-time workers, parents, people in rural areas, or people with disabilities.

• Helps develop new distance education partnership models through the Learning Anytime Anywhere Partnership (LAAP) program, an Administration initiative authorized at $10 million, that awards competitive grants to partnerships between schools and other entities to: create new distance learning models, explore the efficiencies and cost reductions possible through institutional partnerships, and develop innovative measures of student achievement in distance education.

Revolutionizes student aid delivery:

• Creates the federal government's first-ever Performance-Based Organization (PBO) -- a concept promoted by Vice President Gore's Reinventing Government effort -- within the Department of Education to modernize student aid delivery. The PBO will be led by an executive with expertise in financial services and information technology, who reports directly to the Secretary and has new administrative flexibility in exchange for increased accountability for results. The Secretary will continue to be responsible for setting student aid policy.

The Administration is disappointed that the bill contains an unnecessary new lender subsidy and that it does not extend the low student loan consolidation rate for a longer period of time or make it available to borrowers who consolidate their student loans through private lenders in the FFEL program. We will urge Congress to revisit these issues in the future.

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