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Category: Student Aid

Health Reform Legislation Passes Finance and Delays Student Aid Reform

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Yesterday, 10/13/09, the Senate Finance Committee approved a health reform package on a largely party-line vote of 14-9, with only Senator Olympia Snowe (R-ME) crossing the partisan divide. The vote in Senate Finance was the last of the five House/Senate committee (3 House committees, 2 Senate Committees) votes before consideration by the chambers.  Leadership and select members of the committees of jurisdiction will need to work together to merge bills that have been produced. In the Senate, the reform package will need to clear 60 votes to avoid a filibuster, while in the House only a simple majority is needed. At present, a public insurance option appears to be the major point of contention between the more conservative version of reform produced by the Senate Fiance Committee  and legislation advanced by the Senate HELP Committee and the House. After bills pass the Senate and House, differences will again need to be worked out between the chambers so that a single bill can be sent to the President.

Passage of health care reform may be linked to the student aid overhaul that was approved in the House over the summer. If Senate Democrats are unable to pull together the 60 votes necessary to pass health care reform, they may tie the legislation to the student aid bill in the form of a budget reconciliation package that would only require a simple majority to pass. As a result, the Senate companion to the House (H.R. 3221) student aid bill is currently awaiting further developments on the health care reform front. The University of Washington, and much of the higher education advocacy community, is using the extra time allotted for the student aid bill to seek some improvements in the legislation.

Full House Passes Landmark Student Aid Bill

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Today, the full House of Representatives passed the Student Aid and Fiscal Responsibility Act of 2009 (HR 3221) by a 253-171 vote. The bill utilizes savings from the elimination of the Federal Family Education Loan Program (FFELP) in favor of 100% college/university participation in the Direct Loan program. The legislation would index future Pell increases to the Consumer Price Index plus 1%. Financial institutions that provide student loans have fought the elimination of FFELP, as it essentially removes them from the federal student aid market. Funding recouped from the elimination of FFELP will also fund much of President Obama’s college access and persistence plan, as well as a number of additional initiatives.

The University of Washington’s Office of Student Financial Aid, and Office of Federal Relations have been active in providing members of the Washington Congressional delegation with feedback on HR 3221. There remains room to make improvements on the House bill, particularly in its provision of a College Access and Completion Fund, where funding provided to states could result in increased regulatory control by states over institutions of higher education. The legislation is now being worked on the Senate, and is expected to receive full consideration later this fall or early in 2010.

Full Summary of HR 3221

Student Aid Legislation on the Table in Senate

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As Congress returned from August recess earlier this week, student aid advocates immediately focused their efforts on the Senate. In the coming weeks, the Senate will likely consider a companion bill to the House Student Aid and Fiscal Responsibility Act (HR 3221) -which passed easily in the House Education and Labor Committee on July 21st. The House legislation would implement much of President Obama’s student loan proposal, most notably ending the Federal Family Education Loan Program (FFELP) in favor of 100% participation in the Direct Lending (DL) program in order to realize savings that can be used to bolster the Pell Grant program. The House bill was set on a course that would allow for it to be considered as part of a budget reconciliation process or the normal legislative process. The budget reconciliation process may also be utilized for health care reform, as it allows a simple majority (51 votes) to pass legislation in the Senate as opposed to a super-majority of 60 votes. Reconciliation instructions require the House and Senate education committees to report reconciliation bills by Oct. 15. If the deadline is missed, leaders will have to utilize the normal legislative process. 

Although the legislation has traveled a relatively smooth path in the House, the outcome in the Senate is less certain. Some members with FFELP lenders in their states have balked at the Administration’s plan and are exploring alternatives. As a Direct Lending school with a large population of Pell grant students, the UW is actively pushing for legislation that will enable increases in mandatory spending for Pell.

In related news, Senator Harkin (D-IA) will take over the Senate Health, Education, Labor and Pensions (HELP) Committee that was previously chaired by former Senator Ted Kennedy. Despite some concerns about the President’s proposal to end FFELP, Senator Harkin has long been viewed as a reliable advocate for student aid.

Post-9/11 GI Bill to Take Effect

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Tomorrow, Saturday August 1st, the Post-9/11 GI Bill goes into effect. It has been dubbed the most extensive educational assistance program for veterans since the original GI Bill was signed into law in 1944.  The new bill provides education benefits for servicemembers who have served on active duty for 90 or more days since Sept. 10, 2001. These benefits are tiered based on the number of days served on active duty, creating a benefit package that gives current and previously activated National Guard and Reserve members the same benefits as active duty servicemembers.

The UW Office of Federal Relations will be closely monitoring implementation of the program, as members of the WA Congressional delegation have articulated an interest in helping to address policy challenges in this area -as they arise.

Overview of the Post-9/11 GI Bill

Graduate and Professional Loan Subsidy Restored by House

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Yesterday, the House Education and Labor Committee passed HR 3221, Student Aid and Fiscal Responsibility Act of 2009, which was introduced last week. The legislation eliminates the Federal Family Education Loan (FFEL) program and utilizes the $87 billion saved to fund increased Pell grant levels for students (indexed to inflation plus 1%, but subject to appropriations), as well as a number of other K-12/community college/ 4 year higher education programs. A provision of the legislation, strongly opposed by the higher education community, to eliminate the graduate and professional student loan subsify was stripped from the legislation.

The Senate is expected to consider its own version of the legislation after the August congressional recess.

Student Aid and Fiscal Responsibility Act of 2009 Summary