Capital Digest

November 20, 1991 1 min read

A crackdown on student-loan defaulters would help pay for up to 20 weeks of extended unemployment benefits, under a proposal moving through the Congress last week.

The compromise, which President Bush said he would sign, could end months of bitter partisan battle.

The Administration balked at avoiding budget caps by labeling the extension emergency spending. The compromise would use several methods to pay the $5.2-billion cost, including measures that would theoretically raise $2.7 billion by improving collection of defaulted loans.

It would authorize garnishment of up to 10 percent of a defaulter’s wage, require lenders to obtain credit reports from students who are 21 or older, and require schools to obtain information on a graduating student’s intended residence, expected employer, and next of kin.

The Bush Administration and the nation’s governors have tentatively agreed on modifications to rules limiting the ability of states to raise Medicaid funds.

Under the proposed compromise, some common state fund-raising techniques would be left intact and others would be disallowed.

Governors have complained that regulations proposed in September would severely limit their ability to pay for health services for poor people. Earlier this month, a House committee voted to block the regulations for a year.

The Senate was poised last week to give final approval to nominations for three Education Department posts, which were unanimously approved by the Labor and Human Resources Committee.

The nominees are Carolynn Reid-Wallace, assistant secretary for postsecondary education; Donald Laidlaw, deputy assistant secretary for human resources; and Robert Okun, assistant secretary for legislation.

A version of this article appeared in the November 20, 1991 edition of Education Week as Capital Digest