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THE WHITE HOUSE

Office of the Press Secretary

The Higher Education Amendments of 1998:
Five Victories for the Clinton-Gore Administration
October 7, 1998

• slash the student loan interest rate
• help disadvantaged children prepare for college
• improve teacher preparation and recruitment
• promote high-quality distance education
• create a new model for efficient government

1. SLASHES THE STUDENT LOAN INTEREST RATE

Proposal: "We are proposing improvements in the student loan program that will lower the cost of college for millions of students and their families while preserving their access to the loans they need." [Vice President Gore, Press Briefing, February 25, 1998]

Result: As proposed by the President and Vice President, the legislation extends for 5 years the new low student interest rate on new college loans, now 7.46% instead of 8.25%, saving students $11 billion on loans made over the next five years. 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. Borrowers have four months to refinance their outstanding loans at the new rate. The Administration continues to oppose the excessive payments to lenders and intermediaries included in the bill, and supports extending the refinancing window beyond the four month period.

2. HELPS DISADVANTAGED CHILDREN GEAR UP FOR COLLEGE

Proposal: "I also ask this Congress to support our efforts to enlist colleges and universities to reach out to disadvantaged children, starting in the 6th grade, so that they can get the guidance and hope they need so they can know that they, too, will be able to go on to college." [President Clinton, State of the Union Address, January 27, 1998]

Result: The legislation launches a new national effort, incorporating the President's High Hopes for College initiative, to help disadvantaged students prepare for college. Called GEAR UP, this program provides competitive grants to colleges that partner with high-poverty middle schools and the community to tell families early about the financial aid that is available for college, and then to provide long-term mentoring, tutoring, and other assistance to make the dream of college a reality. Grants are also provided to states to encourage broad efforts to provide early information and counseling about college opportunities.

3. IMPROVES TEACHER PREPARATION AND RECRUITMENT

Proposal: "I will forward to the Congress a proposal for a new national effort to attract quality teachers to high-poverty communities by offering scholarships for those who will commit to teach in those communities for at least three years. . . Our proposal also includes funds to strengthen teacher preparation programs so that those who go into teaching are better prepared to teach their students." [President Clinton, NAACP National Convention, July 17, 1997]

Result: The legislation includes the Administration's proposals, and more: 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.

Forgives up to $5,000 in loans for those who teach for five years in a low-income community.

4. PROMOTES HIGH QUALITY DISTANCE EDUCATION

Proposal: "Valuable technologies also are important for providing opportunities in higher education at a time when college is becoming ever more crucial. . . .This is why [we] proposed a number of changes to the Higher Education Act that will broaden learning opportunities." [Secretary Riley, U.S. Distance Learning Association National Conference, November 5, 1997]

Result: The bill includes the Administration's Learning Anytime Anywhere Partnership (LAAP) initiative, and expands student aid eligibility for distance learners. LAAP 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. The legislation also 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 non-traditional students to obtain higher education, including full-time workers, parents, people in rural areas, and people with disabilities.

5. TAKES AN HISTORIC STEP TOWARD A NEW MODEL OF GOVERNMENT

Proposal: "We're going to dramatically change the way many agencies provide their services. Today, I'm proposing to create within existing departments something we call "Performance-based Organizations.". . . These PBOs would be run by chief executives who sign contracts and will be personally accountable for delivering results. . . Their pay and job security will be tied directly to performance." [Vice President Gore, National Press Club, March 4, 1996]

Result: The bill creates the federal government's first-ever PBO, a concept promoted by the Reinventing Government effort spearheaded by the Vice President. The delivery of Federal student aid -- loans, grants, work-study and other assistance -- will be led by an executive with expertise in information technology and experience with financial systems, 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.