House Passes Reconciliation Bill

Yesterday, the House of Representatives passed health-care legislation, paving the way for the House to pass H.R. 4872, the Health Care and Education Affordability Reconciliation Bill of 2010, which contains health-care legislation fixes and the Student Aid and Fiscal Responsibility Act (SAFRA). The House passed the reconciliation bill by a vote of 220-211. H.R. 4872 eliminates the Federal Family Education Loan (FFEL) program and moves all federal student loans into the Direct Loan program. Colleges participating in federal student loans will need to move to the Direct Loan program by July 1, 2010.

Through the conversion to the Direct Loan program, the bill creates $61 billion in savings, which will be utilized for a number of programs and deficit reduction. Most notably, the bill provides $13.5 billion to pay for the Pell Grant shortfall and $22.6 billion to support a Pell Grant maximum increase in an amount equal to the consumer price index, totaling $5,550 in 2010 and up to $5,975 by 2017. (The CPI increase will start in 2013 and end in 2017.) The Pell Grant funding is critical, especially since the newest projected shortfall is $19.5 billion. The infusion of funds will ensure that a large amount of the shortfall is taken care of, but Congress will still need to find the remaining amount in the appropriations process. Additionally, $2.55 billion would be allocated to fund Hispanic-Serving Institutions, Historically Black Colleges and Universities and tribal colleges.

From the community college perspective, the bill contains $2 billion for community colleges, the Community College and Career Training Grant Program ($500 million for each of four years, fiscal years 2011-2014), which was authorized in the American Recovery and Reinvestment Act. The program will support educational and career-training programs focused on dislocated workers and unemployed workers. The program will likely be a competitive program, but each state will be guaranteed .5% of the total funding, which totals $2.5 million per state. The program will be run by the Department of Labor and is located within the finance section of the bill.

ACCT sent a letter in support of the education related provisions within H.R. 4872, the letter can be read at: http://www.acct.org/Miller4872LetterSupport.pdf

A fact sheet from the House Committee on Education and Labor can be read at: http://edlabor.house.gov/documents/111/pdf/publications/20100318StudentAidandFiscalResponsibilityAct.pdf

H.R. 4872 now heads to the Senate for consideration. The Senate is expected to take a considerable amount time to debate amendments and points of order to the overall bill. It still expected that the Senate will pass the bill. If there are no changes, the bill will be sent to the President for his signature. If there are changes, the House will need to reconsider and pass the modified bill.