The House and Senate passed the 2010 budget resolution on Wednesday with reconciliation instructions to make it easier for the Senate to pass student aid reforms. The House voted 233-193 to adopt the budget resolution and the Senate adopted it by a 53-43. Both votes were along party lines with all Republicans in both chambers voting against the bill.
One of the reconciliation instructions in the bill directs 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. The budget resolution would also create a "reserve fund" that could be used to move Pell Grants to mandatory funding and annually increase the maximum Pell award based on the Consumer Price Index (CPI). While the budget resolution accommodates the student aid proposals put forth by Obama (to eliminate FFELP and make Pell a mandatory spending program), it does not guaranty that Obama's proposals will be adopted. The House and Senate will ultimately have to agree on what changes will be made to the student aid programs.
The inclusion of reconciliation instructions will make it easier for the Senate to adopt student aid reform by lowering the number of votes needed to avoid filibuster from 60 to 51. President Obama's 2010 budget proposal advocates the elimination of FFELP and using the savings to make Pell Grants a truly mandatory spending program, but Congress has shown some caution about adopting the President's proposals.
The budget resolution includes a "sense of Congress" that changes to the loan programs "should include some future role for the currently involved private and nonprofit entities, including state nonprofits with 100 percent [guaranteed lending] in the state." In addition, the sense of Congress notes that "loan processing, administration, and servicing should continue to be performed, as needed, by for-profit and nonprofit lenders."
By Haley Chitty
NASFAA Director of Communications
Posted 04/30/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
