The House overwhelmingly passed the College Student Relief Act (H.R. 5) by a 356 to 71 vote on Wednesday, the largest number of yea votes and smallest number of nay votes of any of the five bills passed so far as part of the six bills Democrats promised to pass in the first 100 hours of the 110th Congress.

Many Republicans supported the bill despite complaining about provisions it contained and about the process used to pass the bill.

Republicans and Democrats agreed that students and families need more assistance to pay for the rapidly increasing cost of higher education, but they could not agree on the best way to provide that assistance.

Democrats touted the bill as an important first step to help students and their families pay for college by easing the burden of student loans, and promised more action, including increasing spending on the Pell Grant program.

Republicans criticized Democrats for not following through on their campaign promises to immediately cut interest rates on all student loans in half and to work in a bipartisan manner to develop legislation.

Ranking Republican on the House Education and Labor Committee Howard "Buck" McKeon (R-CA) argued that, while the bill was "well-intentioned," it was a bad bill that could have been made better if it were a bipartisan bill.

McKeon and other Republicans complained that Democrats did not keep their campaign promise to work in a bipartisan fashion as Democrats did not hold any committee hearings on the bill or allow any amendments to the bill on the House floor. Instead, the bill was written by majority leaders with no input from the minority, according to McKeon.

"The process followed to get this bill to the floor was badly flawed and the legislation in question is a reflection of that process," McKeon said.

McKeon attempted to have the bill considered in the Education and Labor Committee by filing a motion to recommit the bill to the committee, but this motion was defeated by a 186 to 241 vote generally along partisan lines.

Doris Matsui (D-CA) a member of the House Committee on Rules argued that U.S. citizens spoke in the 2006 election and they want action and results. Democrats plan to deliver those results, Matsui said.

McKeon and Republicans also repeatedly criticized Democrats for not following through on their campaign promise to immediately halve the interest rates on all student loans and for ending the 3.4 percent rate six months after it is enacted.

Rep. Pete Sessions (R-TX) described the bill as a "bait and switch" to capture votes.

Democrats have indicated that they are going to extend the 3.4 percent rate through additional legislation, but had to put the sunset date in the legislation to comply with "paygo" rules. On the House floor, Miller compared the sunset on the 3.4 percent interest rate in 2012 to the sunset on tax cuts passed by Republicans, arguing that, like the tax cuts, Democrats planned to extend the rates beyond the Jan. 1 2011 sunset date.

Republicans further argued that the money created by increasing lender fees and reducing lender subsidies could have been better spent by increasing front-end benefits like the Pell Grant. Countless Republicans argued that the bill did nothing to increase college access because it did not help students it only helped college graduates.

"The Democrats should have taken the $6 billion in spending and invested it in Pell Grants to help students on the front-end instead of the only helping those college graduates on the back-end," said Ric Keller (R-FL), the ranking Republican on the House Subcommittee that is in charge of higher education issues. "I'll show good faith today and vote for the bill. Tomorrow I hope Democrats will show good faith and listen to people like me when it comes to Pell Grants."

Tim Bishop (D-NY), a member of the House Education and Labor committee and former provost of Southampton College, argued in a CSPAN interview that, contrary to Republican claims, the bill would increase college access.

"There is no question that future obligations weigh heavily on the minds of students and their parents," Bishop said. "By reducing future obligation associated with loans, we are absolutely increasing access and affordability."

In addition, Democrats repeatedly assured Republicans that the bill was only a first step and that they planned on increasing the maximum Pell Grant as part of their comprehensive plan to address college cost issues. Miller hinted that Democrats would likely increase the Pell as part of the appropriations process. He also assured McKeon that college accountability provisions in McKeon's College Affordability & Transparency Act would be considered when they consider reauthorization of the Higher Education Act later this year.

In a letter to lawmakers, NASFAA President Dallas Martin endorsed the College Student Relief Act, but urged lawmakers to place the "highest priority" on increasing Pell Grant funding, recommending that the maximum Pell Grant award for FY 2008 be increased to $5,100. In addition, Martin advocated sensible modification and increased funding of campus-based financial aid. He also urged lawmakers to increase federal loan limits so that borrowers are not forced to take out alternative, private loans which generally carry a higher interest rate and usually lack borrower benefits like deferments, consolidation or loan cancellation for those who pursue certain careers.

"NASFAA has long-supported and urged congressional action to change the Title IV programs to achieve the goal of universal access to a postsecondary education," Martin wrote. "This bill is a positive first step in rebuilding the Title IV student assistance programs."

The bill now goes to the Senate where it is expected to be included in a larger higher education bill.

Sen. Edward Kennedy (D-MA) the chairman of the Senate Health, Labor, Education and Pensions Committee issued a press release indicating that he is co-sponsoring the Senate companion bill to H.R. 5 and that he will reintroduce his Student Debt Relief Act. He hopes to move a Senate student loan package in February.

According to Kennedy's press release, the Student Debt Relief Act will:

• Cut student loan interest rates in half – from 6.8 percent to 3.4 percent.
• Immediately increase the Pell Grant from $4,050 to $5,100.
• Caps federal student loan payments at 15% of a borrower's discretionary income. Forgives student loans after 25 years, and provides an option for 10-year loan forgiveness for individuals in public service careers, like teaching, law enforcement, and social work.
• Reform the student loan programs to encourage the use of the government's less expensive Direct Loan Program.

Additional Media Coverage

Rancorous House Backs Student Loan Bill (Inside Higher Ed)

House Passes Bill to Halve Student-Loan Interest Rate (The Chronicle of Higher Education A paid subscription may be required

House Approves Cuts In Cost of Student Loans (The Wall Street Journal) A paid subscription may be required

House OKs Bill That Cuts Student Loan Interest Rates (Associated Press)

House Passes Student-Loan Interest Bill (The Los Angeles Times)

Student Loan Rates Slashed by House (Chicago Sun-Times)

House Votes to Reduce Rates on Student Loans (The Washington Post)

House Cuts Interest Rate for Some College Loans (The New York Times)

By Haley Chitty
NASFAA Assistant Director for Communications

Posted 01/18/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.