Late yesterday afternoon the Congressional Budget Office (CBO) released a cost estimate for the Ensuring Continued Access to Student Loans Act (HR 5715), a bill introduced by House education committee chairmen George Miller (D-CA) that seeks to eliminate the possibility of disruptions in federal student loans this coming academic year. Miller's bill would make several changes to the federal student loan programs and provide additional backstops to provide liquidity in the federal student loan marketplace. The bill was passed unanimously by the House education committee last week.

The CBO estimates that enacting the bill would increase direct spending by $320 million from 2008 to 2013 and by $390 million from 2008 through 2018. The bill would have no impact on revenues, according to the CBO report.

Miller’s bill could come to a full House vote as early today. As of last night, several amendments had been offered up to the House Rules Committee for consideration. Some of those amendments include the following.

• An amendment requiring the Secretary of Education to consult with the Secretary of Treasuring to ensure there is an inadequate availability of capital before authorizing the purchase of loans and in developing standards before using the lender-of-last-resort process

• An amendment requiring the Secretary to pay a "fair value" for these loans purchased by the Department but not less than the total outstanding principal of such loans, any accrued, unpaid interest on such loans, and the eligible lenders' cost of originating such loans, including any organization fees paid by the lender

• An amendment allowing parent PLUS borrowers access to PLUS loans despite being delinquent for up to 180 days on medical bills

• An amendment that would give the Secretary of Education the authority to waive loan origination fees for lenders of last resort

• An amendment to delay the implementation of the PLUS loan auctions until July 2010

• An amendment that clarifies that, at the discretion of the Secretary, a loan purchased by the Secretary may continue to be serviced by the current lender

Sen. Edward Kennedy (D-MA), chairman of the Senate's education committee, has also introduced his own legislation that seeks to avert disruptions in federal student loans. The Strengthening Student Aid for All Act (S. 2815) has not yet been considered in the Senate education committee. NASFAA provided a side-by-side comparison chart of the two bills last week.

By Justin Draeger
NASFAA Assistant Director for Communications

Posted 04/16/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.