Congress has just eight weeks to tackle a very aggressive legislative agenda before they are scheduled to break for August recess. This legislative agenda includes two pieces of legislation that will have an impact on higher education: the Technical Amendments Bill (H.R. 1777) and the budget reconciliation legislation which is expected to include significant changes to student aid. The Obama administration has asked Congress to eliminate the FFEL program to offset increases in the Pell Grant.

Congressional staff say they would like to have H.R. 1777 completed by the end of June. The Technical Amendments bill would: assist borrowers who are unable to rehabilitate their loans due to current market conditions, move up the date (from July 2010 to July 2009) for veteran education benefits to be excluded when determining eligibility for student loans and campus-based aid, and delay implementation of the simplified Free Application for Federal Student Aid (FAFSA). In addition, Congress is expected to make changes to the data elements of the self-certification form.

Congress will also be working on its 12 annual spending bills. Senate Majority Leader Harry Reid (D-NV) told Congress Daily that he would like to complete some of the 12 appropriations bills by the Independence Day recess.

But finishing those spending bills will be challenging, especially given the amount of other legislative tasks that need to be completed. Congress is also juggling a $90 billion war spending bill that has caused a rift between Democrats and Republicans. In addition, Congressional leaders have also said they would like to tackle climate change legislation and food and drug legislation to regulate tobacco before the August recess.

Above all, healthcare reform and the confirmation of Supreme Court Justice Nominee Sonia Sotomayor will dominate Congressional time and resources in the coming weeks and months.

In April, Congress passed the 2010 budget resolution with reconciliation instructions that direct the House and Senate education committees to create $1 billion in savings. These savings are expected to come from changes to the student loan program. If Congress cannot agree on how best to accomplish that goal through normal legislation, reconciliation instructions would make it easier for Congress to pass student aid reforms without bipartisan support. Reconciliation could also be used to push through healthcare reforms if that legislation cannot be passed through normal legislation.

Congress is expected to focus on healthcare before releasing any higher education legislation on the Pell Grant or on the student loan programs, and healthcare faces some steep obstacles.

In the Senate, healthcare reform will be tied up in two committees: the Health, Education, Labor and Pensions Committee and the Senate Finance Committee. In the House, healthcare legislation may move at an even slower pace since it will be tied up in three committees: the Education and Labor, Energy and Commerce, and Ways and Means Committees.

Whether Congress can complete action on healthcare by the August recess is questionable, but it appears that higher education legislation shouldn't be expected until late July or September. The reconciliation instructions direct Congress to report reconciliation legislation by Oct. 15.

Other noteworthy recent legislative activity includes:

• Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 (Public Law No: 111-024). The legislation, signed into law on May 22, amends the Truth in Lending Act to establish fair and transparent practices relating to credit cards. There are many provisions in the bill that affect college students and institutions of higher education. NASFAA provided a summary of the CARD Act on May 21.
• Medical Economic Deferment for Students (MEDS) Act (H.R. 1615). The MEDS Act was introduced on March 19 by Rep. Vernon Ehlers (R-MI) and is now in committee. The bill would retain the current debt-to-income ratio pathway (also known as 20/220) for borrowers to qualify for an economic hardship deferment in both the FFEL and Direct Loan programs that is scheduled to end on July 1, 2009. NASFAA has written a letter expressing our full support to Rep. Ehlers.
• Tax Relief for IBR Loan Forgiveness (H.R. 2492). NASFAA worked with the Institute for College Access and Success (TICAS) in contacting Congressmen and drumming up support for this legislation that was eventually introduced by Rep. Sander Levin (D-MI) and cosponsored by several other representatives. The legislation would specifically exclude loan forgiveness received through the Income Based Repayment (IBR) plan from being counted as taxable income. NASFAA has sent a "call to action" to state and regional presidents seeking additional support.

By Justin Draeger
Vice President of Public Policy, Advocacy, and Research

Posted 06/08/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.