The Senate easily passed its version of the higher education reconciliation bill (H.R. 2669) early Friday by a 78 to 18 vote after rejecting an amendment that would have reduced the subsidy cuts to lenders by $2.4 billion.
The Senate also agreed to a Unanimous Consent request to bring up on Monday afternoon floor debate on the Senate committee-reported bill extending the authorization of the Higher Education Act (excluding the provisions of the Reconciliation bill).
The Senate narrowly rejected by a 36 to 61 vote the amendment by Sens. Ben Nelson (D-NE) and Richard Burr (R-NC) that would have reduced the cuts to student loan companies' special allowance payments from .5 percent to .35 percent.
The Senate approved two amendments to the bill.
Sen. Lisa Murkowski's (D-AK) amendment dramatically increases funding (from $25 million to $113 million) for the College Access Partnership Grant using excess savings in the bill that were unused. The bill created the College Access Partnership Grant to pay states to assist in increasing college participation and access among low-income students in the state.
Senate education committee Chairman Edward Kennedy's (D-MA) amendment extends funding for the Promise Grant program from 2014 through 2017. The bill would create a the new Promise Grant program for low-income, Pell-eligible students to supplement - not replace - other federal, state, and institutional grant aid.
Senators also rejected an amendment that would have scrapped the provision in the bill that provides loan forgiveness to Direct Loan borrowers who are employed in public service jobs for 10 years.
The Senate approval clears the way for the Senate and House to set up a conference of negotiators from both chambers to iron out the differences between the two bills. Generally, the House bill directs more student loan subsidy savings to provide borrower benefits while the Senate bill directs more of the savings to increasing grant aid.
The White House has issued two statements of administration policy (SAP) stating that it could not support the Senate or House version of the bill. The SAP on the House version of the bill threatens to veto the bill if it arrives on the President's desk in its current form. The SAP on the Senate bill is more conciliatory, stating that the administration will work with Congress to resolve issues through the legislative process.
During debate on the Senate floor, Republicans expressed concern that the bill would cut lender subsidies too deeply causing smaller and medium sized lenders to drop out of the loan program, reducing competition and benefits for students. Some Republicans, including Sen. Lamar Alexander (R-TN) also argued that provisions in the bill gave the Direct Loan program an advantage over the FFEL program. They expressed concern about upsetting the competition between the two programs and promoting a program that many schools have left in favor of the FFEL program.
Kennedy argued that the bill offered a basic choice between students and banks. The bill offered a chance to side with students over banks, he said. Reducing the cuts to lenders or eliminating provisions that benefited Direct Loan borrowers would be siding with bank interests over student interests he argued.
"The passage of the Higher Education Access Act tonight was a victory not only for students and their families, but for the American people," Kennedy said. "With this new congress we made education a national priority again, and we've given the next generation the tools they need to compete in the global economy."
Additional Media Coverage
By Haley Chitty
NASFAA Assistant Director for Communications
Posted 07/20/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
