Senate Poised to Pass Reconciliation Bill, Needs to go Back to House for Consideration

Yesterday, during the Senate debate on 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), two provisions within the bill 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. The two violations are being removed the bill. The Senate also defeated a number of amendments that would have changed the underlying bill. The Senate will continue considering amendments, with a goal of final passage of the bill sometime today. Since the Senate bill is now different than the House bill, when the Senate passes the bill, it will be sent back to the House for its consideration.

This past weekend, the House passed the reconciliation bill by a vote of 220-211. The House is working to schedule a vote on H.R. 4872 once the Senate completes the bill. Congressional leaders are working to finalize and pass the legislation prior to Congress adjourning for the spring district work recess, which starts on Monday. House leaders expect to pass the revised bill, which will then be sent to President Obama for his signature. President Obama supports the reconciliation bill.

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 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.

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