Congress Passes Reconciliation Bill; Heads to President's Desk for Signature

Yesterday, Congress passed 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). Earlier in the day, the Senate passed the bill by a 56-43 vote, after removing two provisions within the bill that were found to be in violation to the reconciliation rules. Of the two violations, the most important one was a “hold harmless” provision related to the Pell Grant program. The “hold harmless” provision was supposed to ensure that students would not see a drop in the Pell maximum if funding for Pell declined. This provision would not kick in until FY2013, when the maximum is expected to increase within the bill. Additionally, the maximum would only decrease if Appropriators significantly lowered the discretionary Pell Grant maximum base, which is $4,860. Congressional leaders are working to reinsert the “hold harmless” language in to another bill.

After Senate passage, the House quickly passed the revised reconciliation bill by a vote of 220-207. With House passage, President Obama is expected to sign the bill very soon. As of today, Congress will be out of session through the next two weeks as part of the spring district work recess, which starts on Monday.

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 the federal student loans program 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 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 (meaning that colleges must submit an application in order to receive funding), 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.

In other news, Under Secretary of Education Martha Kanter and Assistant Secretary of the Employment and Training Administration Jane Oates testified yesterday before the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies. During the hearing, Kanter and Oates called for Congress to reauthorize the Workforce Investment Act.

More information including the testimony on the hearing can be found here: http://appropriations.house.gov/Subcommittees/sub_lhhse.shtml