While much of the media has focused on the passage of health care legislation in the last few days, the passage of this bill also signals the passage of student aid reform that many in higher education have worked hard to move forward and waited months for approval.
On Sunday, March 21 the U.S. House of Representatives passed a reconcilation bill to reform student aid and health care by 220-211. The bill makes several changes to student financial aid policy and provides funds to community colleges and historically black higher education institutions. Of much significance is the elimination of the Federal Family Education Loan Program (FFELP) on July 1, 2010 and the use of the estimated savings to increase funding for Pell Grants.
Prior to the passage of the reconciliation bill containing the changes to student aid, the House passed the Senate-passed health care reform package (which also included significant student aid provisions) by a 219 to 212 vote.
The student aid reform included in the reconciliation bill passed by the House was a leaner version of the Student Aid and Fiscal Responsibility Act (SAFRA). Democrats had to revise the bill when the Congressional Budget Office showed that expected savings from the elimination of the FFELP were lower than previously estimated and eliminate the proposal of several new programs to comply with procedural requirements in the Senate.
Four major provisions that were a part of SAFRA were not included in the student aid legislation passed by the House on Sunday. They include:
- The Obama Administration’s proposal to revise the Perkins Loan Program
- A provision to lower interest rates on student loans
- Funding for Obama’s American Graduation Initiative to help community colleges graduate five million more students by 2020.
- $2.5 billion for a new College Access and Completion Fund
The passage of the bill by the House clears the way for the legislation to be considered by the Senate as early as this week. Debate on the bill in the Senate will be limited to twenty 20 hours and requires only 50 votes to approve the bill to be signed into law by President Obama. If the Senate makes any changes to the bill, the legislation would have to be sent back to the House for another vote.