NAICU Washington Update

Hurry Up and Wait Again for Higher Education Legislation

October 08, 2009

After a fast-paced few months of developments on implementing of the president's student aid proposals (see September 2 and September 28 Washington Update stories), the action has slowed dramatically in Washington, as everyone awaits the outcome of health care legislation.

The president's student aid bill has special budget reconciliation instructions that make it possible to pass the bill with only 51 votes in the Senate.  Because of this, the student aid bill is now on hold - if consensus can't be reached on health care, the plan is to tack that legislation onto the student aid bill.

Under the special budget reconciliation rules passed last spring, all committees were supposed to approve legislation by an October 15 deadline.  Now, however, congressional leaders are saying that date is really just a "target," not a "deadline."  So the Senate student aid bill is on hold - likely beyond the October 15 "target" -  until the legislative fog around health care clears.

The House has already passed its student aid bill, and there has been close communication among the House, Senate, and administration on bill details.  Still, it's widely anticipated that the Senate will write its own bill, which may differ from the House approach. Among the key issues for NAICU institutions:

  • A mandated conversion to direct loans is still expected in the Senate, though a higher proportion of senators have concerns about the idea than do House members.
  • The Senate bill also is expected to reconfigure the Perkins Loan program, both by eliminating some important borrower benefits, and by permitting up to a six-fold increase in annual lending authority.  However, formulas for distributing new money could look different than in the House.
  • Both the House and Senate bills anticipate a new role for states in helping the president reach his goal of having the U.S. achieve global leadership in college completion by 2020.  The Senate approach, though, may differ dramatically from the House - especially on the role of governors and state higher education agencies.
  • Both are likely to increase funding for state student unit record systems.  While the House bill exempts private colleges from state mandates in these programs, it's not clear that the Senate will take the same approach.
  • Both will include new funding for community colleges, but the Senate may send more of the money directly to the colleges rather than through state bureaucracies.
  • Both are expected to fund an additional array of non-higher education programs - including those in early childhood, elementary, and secondary education.
  • Both will provide for more than $40 billion in additional Pell Grant funding over the next 10 years.
  • Both will take steps to simplify the FAFSA, although the Senate may be more generous in setting the maximum asset level allowed before families are automatically cut off from federal need-based aid.

Stay tuned for updates - and most likely a big congressional showdown as the holidays approach and members feels the mounting end-of-the-year pressure.

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