President Signs Higher Education Reconciliation Bill

Last Thursday, President Bush signed H.R. 2669, the College Cost Reduction Act in to law (P.L. 110-84). The bill, touted by supporters as the single greatest aid bill for college students in more than a decade, passed both chambers of Congress with overwhelming bipartisan support, making the possibility of a veto unlikely. The President conceded to sign the bill, but stated that he is looking forward to working with Congress on finding offsets for the Pell grant increase and other spending commitments that are not paid for in this bill.

The College Cost Reduction Act, commissioned in the fiscal year 2008 budget resolution, provides more than $20 billion in federal aid to college students. The bill slashes federal subsidies to private loan companies and increases grants for students. It will gradually reduce interest rates on federally subsidized loans for low-income students to 3.4% over five years. The law will also offer loan forgiveness for those who have held public service jobs for 10 years and will cap payments on federal loans at a certain percentage of a college graduate's income.

Congress still has yet to complete work on reauthorizing the Higher Education Act (HEA), a bill that would build upon the efforts of the College Cost Reduction act by increasing aid to students, and setting strict standards for tuition and other policies at public universities. The Senate passed their HEA Reauthorization bill, S. 1642, buy a vote of 95-0 on August 1.

The Senate bill will:
• Increase the amount of information that schools and lenders must provide to students, including up-front disclosure of loan rates and terms and data on total school costs, and would ban lenders from giving schools financial aid funds or any other perks to get on a preferred lender list;
• Direct the U.S. Secretary of Education to assess costs that drive tuition increases and examine ways to contain costs and track pricing trends, alerting schools that the government will monitor tuition increases and consider ways to curb them; and
• Require colleges and universities to draft codes of conduct governing relationships with lenders, shorten the application form for federal student aid, and authorize a pilot program to allow students to learn the total aid they can expect to receive up to two years in advance.

The House currently has no draft proposals for its HEA reauthorization. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, commented that the House will not move forward on the HEA until it completes work on reauthorizing No Child Left Behind.

Resources:
Jonathan D. Glater, “President Signs Overhaul of Student Aid,” New York Times, September 28, 2007.
Ian Shapira, “Bush Signs Sweeping Student Loan Bill Into Law, Adding an Asterisk,” Washington Post, September 28, 2007.
Author: SAS