President Bush yesterday
signed into law S. 1932, The Deficit Reduction Act of 2005. The reconciliation bill includes $12.7
billion in net savings to the government over five years, achieved through changes to the student
loan programs. That $12.7 billion is almost one-third of S. 1932's total
savings for deficit reduction.
There is speculation among our members and others in the postsecondary community that by signing the
reconciliation bill (S. 1932) into law that the Higher Education Act (HEA)
reauthorization is dead.This speculation is not true; HEA
reauthorization is alive. The Congress is not finished with reauthorization of
the Higher Education Act because important statutory provisions need to be
reauthorized and such provisions are not part of S. 1932. The current
HEA extension expires on March 31, 2006.
Let me be clear: HEA reauthorization is not over. HEA reauthorization debates and congressional
action continues. Important work needs to be accomplished so that the rest of
the reauthorization bill bests meets the needs of students, schools, and
financial aid administrators. The current congressional reauthorization bills need improvement to meet those needs.
In his statement
at the bill signing ceremony, President Bush referred to the student aid cuts by saying, "The Deficit Reduction Act makes important improvements to federal
student loan programs. The bill cuts excess government subsidies to lenders and
makes other reforms that will help us reduce overall student loan costs by
about $22 billion. With that money, we will save taxpayers $12 billion --
because we intend to increase student aid by 10 additional billion dollars.
What I'm telling you is, the students are getting the money, and we're making
the program a lot more efficient for the taxpayers."
NASFAA has prepared a document that highlights
a number of the changes made by S. 1932. Staff are working on a
side-by-side comparison of the legislative language among the reauthorization
and reconciliation bills. Staff are also preparing a more comprehensive report
explaining the provisions of the bill in more detail. Both documents will be
available soon.
There are numerous provisions in the
reconciliation bill that need to be implemented
and confusion will be evident. In a
letter to Education Secretary Spellings, NASFAA notes that "many of
the provisions affecting the student aid delivery system are effective July 1,
2006the beginning of the 2006-07 award yearyet the 2006-07 Free Application
for Federal Student Aid (FAFSA) is currently in use by students and their
families and the Central Processing System is already fully operational."
Since making changes at this point could have a disruptive effect on the
delivery of aid to needy students, NASFAA proposed several recommendations
"to make certain that students are systematically informed of these
important changes and have a consistent way to make necessary corrections with
a minimum of processing disruptions at their schools and the CPS."
By Larry Zaglaniczny
NASFAA Director for Congressional Relations
Posted February 9, 2006 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2006. Redistribution to non-NASFAA institutions is prohibited
Please submit Web Site questions or comments to Web@NASFAA.org
