Congress Passes HEA Extension

On Wednesday, June 27, the Senate passed S. 1704, a 30-day extension for the Higher Education Act (HEA), which is set to expire on Saturday. The House, which had passed its own four-month extension earlier this session, followed suit and passed the Senate extension so the bill can go to President Bush before the Saturday deadline. The extension will run through July 31, 2007. Considering the week-long recess next week, this leaves Congress with less than a month to complete work on the HEA reauthorization.

Last week, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously passed its HEA bill. The Senate bill, S. 1642, increases the amount of information that schools and lenders must provide students about their loans. The bill will also ban lenders from providing school financial aid officials with perks such as student aid assistance in order to be on schools’ “preferred lender” lists. The measure would shorten the form that students must complete for financial aid and would direct the U.S. Department of Education (ED) to track tuition increases and assess the drivers behind increasing college costs, putting schools on notice that the government is concerned about rapid tuition increases. The Senate has not scheduled time for a floor debate for the reauthorization, and the House Education and Labor Committee has not marked up its own reauthorization, so there is still a lot of work to do.
Although the House has not moved on to HEA reauthorization, both Congressional panels passed a higher education reconciliation bill, as directed by the joint budget resolution Congress passed in May. The Senate bill cuts federal subsidies to lending companies by as much as $19 billion. The bill will channel most of those savings to student aid and ease repayment rules for borrowers. It also creates a new entitlement funding stream for Pell grants that would not be subject to the annual appropriations process. The bill intends to boost the maximum Pell grant by more than $1,000, to $5,400 by 2011. The bill would establish new "Promise Grants" for the neediest Pell recipients, cap student loan repayments at 15% of discretionary income and offer loan forgiveness for some public-service employees. The House passed a similar measure earlier this month, though neither chamber has considered their bills on their respective floors.
Resources:
Libby George, “House Clears Temporary Extension of College Aid Law,” CQ Today, June 28, 2007.
Author: SAS