Student Aid and Fiscal Responsibility Act of 2009

Yesterday, Chairman George Miller (D-CA) introduced H.R. 3221, “Student Aid and Fiscal Responsibility Act of 2009.” The eliminates the Federal Family Education Loan program and originates all new federal student loans through the Direct Loan program starting in 2010. In total, this conversion generates $87 billion in savings.

In turn, the bill provides significant funding increases for a number of programs, including:

• Investing $40 billion to increase the annual Pell Grant maximum to $5,550 in 2010 and to $6,900 by 2019. Starting in 2010, the maximum will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percent;
• Providing $9.5 billion for community colleges, with $2.5 billion in FY2011 for community college infrastructure and $7 billion (over ten years) for competitive grants to community colleges and states;
• Providing $3 billion to bolster college access and completion support programs for students;
• Strengthening the Perkins Loan program;
• Keeping interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012;
• Simplifying the FAFSA form;
• Providing $1.2 billion for Historically Black Colleges and Universities and Minority-Serving Institutions;
• Providing $10 billion for Early Learning programs; and
• Providing $10 billion to pay down the federal deficit.

Most importantly for community colleges, the initiative is broken down to three distinct programs:

1. $2.5 billion in FY2011 for grants to community colleges to modernize, renovate, and repair their facilities.
2. $6.3 billion over ten years for the Community College Challenge Grant Program, which will provide competitive grants. The first four years are geared towards community colleges and states. The remaining six years are targeted towards states.
3. $700 million for competitive grants for national activities, including grants to develop free online training and courses.

ACCT is working with Chairman George Miller’s office to refine the legislation. The House Education and Labor Committee is expected to consider the bill next Tuesday. ACCT will provide updates as further information becomes available.

To see the full press release, visit: http://edlabor.house.gov/newsroom/2009/07/chairman-miller-introduces-leg.shtml