Congress Passes Higher Education Reconciliation Bill

Congressional negotiators agreed on a conference report for H.R. 2669, the College Cost Reduction Act on Wednesday, September 5. The joint budget resolution for fiscal year 2008 (FY08) called for the House and Senate Education Committees to generate $750 million for budget reconciliation, which H.R. 2669 does. Both chambers passed the conference report today. The Senate passed it by a vote of 79-12 and the House by a vote of 292 - 97.

The conference report raises the maximum value of the federal Pell Grant scholarship by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006. Roughly 5.5 million low- and moderate-income students would benefit from the increase. Additionally, the bill cuts interest rates on need-based student loans in half, from 6.8% to 3.4%, over the next four years. According to House Education and Labor Committee Chairman, once the cut is fully phased-in, it would save the typical student borrower $4,400 over the life of the loan. Chairman Miller also claims that the legislation would make loan payments more manageable for students, provide tuition assistance for undergraduate who agree to teach in high-need areas, invest in minority institutions and provide loan forgiveness for some government workers, such as military officers, police officers, firefighters and teachers.

Although the bill enjoys widespread bipartisan support, some Republicans still have reservations over the conference report. House Education and Labor Committee Ranking Member Howard "Buck" McKeon (R-CA) criticizes the fact that the $19 billion cut to subsidies for the student lending industry is not being put to effective use. McKeon and other Republicans argue that the money from the cuts could pay for greater increases in the maximum Pell Grant, an issue that generally receives the widest margin of bipartisan support.

Originally, the White House strongly opposed the House version of the bill, which created additional entitlement programs in grants for students. Despite previous veto threats, White house officials assured Congressional leaders that the president will sign the bill, and although he has some reservations regarding the interest rate cuts, public support for the bill has likely swayed the president's stance. The bill should be signed by the September 15 deadline set in the budget resolution.

Resources:
Stephen Langel, "Officials Say Bush Will Accept Deal on Higher Ed Package," Congress Now, September 6, 2007
Author: SAS