Higher Ed Roundup: Week of April 14 – April 18

House Passes Bill to Ease Credit Crunch Impact on Student Loans, Others in the Works

No Crisis Here, Says American Council on Education

Dems Introduce Legislation to Allow Private College TA Unions

House Passes Bill to Ease Credit Crunch Impact on Student Loans, Others in the Works

The U.S. House of Representatives overwhelmingly approved legislation on Thursday designed to increase federal loan options for students and ease the effects of the credit crunch for lenders that participate in the Federal Family Education Loan (FFEL) program. The bill, which passed by a vote of 383 to 27, would increase the annual and aggregate federal unsubsidized Stafford loan limits, allow parents to defer payments on PLUS loans while their children are in school, and establish the Department of Education as a “secondary lender of last resort” with the power to purchase outstanding FFEL loans and service them through the Direct Loan program. The House also approved several amendments to the bill, including one that would require the Government Accountability Office to conduct a study to determine whether the loan limit increase causes colleges to raise their prices. The study would also look into whether increase the limit on federal loans has the desired effect of leading colleges to reduce their students’ use of high cost private loans.

In a Statement of Administration Policy, the White House expressed general support for the legislation, but shared concerns with for-profit colleges that increasing federal loan limits may push the trade schools’ dependence on federal funds beyond the 90 percent limit required in order to participate in the federal student-aid program.

Meanwhile last week, Sen. John Kerry (D-MA) introduced legislation to use the Federal Home Loan Bank System to boost liquidity in the student loan market. The Emergency Student Loan Liquidity Market Act, is a companion bill to legislation that was introduced two days earlier in the House by Rep. Paul Kanjorski (D-PA). It would allow the Federal Home Loan Banks to use surplus funds to invest in student loans, use student loans and related securities as collateral, and advance funds to member banks to originate student loans.

No Crisis Here, Says American Council on Education

There may be cries of panic from some in Congress and the student loan industry, but the one of the leading lobby groups for higher education reports no evidence of a “student loan crisis.” Terry Hartle, senior vice president of the American Council on Education (ACE), reported to the Senate Committee on Health, Education, Labor and Pensions on Thursday that the organization has not heard complaints so far. He added that the group will continue monitoring the situation. The council briefed staff working for the Senate panel’s chairman, Sen. Edward Kennedy (D-MA), two days after the Senator sent a letter to the ACE, urging its member institutions to sign up for the Direct Loan Program, even if they have no intention of using it. [Disclosure: the Editor of Higher Ed Watch used to work for Kennedy.]

Meanwhile, the Department of Education is planning its own assessment of student loan availability, as part of its efforts to monitor the situation. A proposed emergency survey of all FFEL colleges, will ask schools if they have secured lenders for the 2008-09 academic year and requests a list of these lenders.

Dems Introduce Legislation to Allow Private College TA Unions

Teaching assistants at private colleges and universities would be granted the same right to unionize and engage in collective bargaining as their peers at public schools under a bill introduced Thursday. Sen. Edward Kennedy (D-MA) and Rep. George Miller (D-CA) dropped companion versions of legislation that would overturn a 2004 ruling by the National Labor Relations Board (NLRB) holding that private college teaching assistants are primarily students, not employees, and thus do not have the right to unionize. Public colleges are not affected by the same ruling, because teaching assistant unions there are covered by state laws. [Disclosure: the Editor of Higher Ed Watch worked for Kennedy.]