While the passage in the House of Representatives of the
Health Care and Education Affordability Reconciliation Act last week will fundamentally reshape the US healthcare system, it will also improve the way students fund their post-secondary education.
But the student aid legislation fell short of its earlier iteration in the Student Aid and Fiscal Responsibility Act. That legislation was passed, with nearly two-thirds' support in the House last September, but was then stalled in the Senate.
Among the provisions not adopted in the latest bill were the Perkins loan program, the American graduation initiative and the college access and completion fund. These were all part of the Obama administration's highly touted attempt to increase accountability among institutions in exchange for funds and the number of college graduates by five million by 2020.
Other sacrifices included drastically cutting the $12 billion promised to community colleges in September to $2 billion. Although disappointed, community colleges leaders also acknowledged that, in the current economic situation, any funding was good.
Eduardo J Martí, President of Queensborough Community College, part of the City University of New York system, said: "This is the very first time the federal government is providing direct aid to community colleges. So even though $2 billion is one-sixth of what we were hoping for, it's really welcome."
The legislation was marked by further compromises - including $8 billion cut from early childhood education - while guaranteeing $2.55 billion in funding to minority-serving colleges.
The biggest triumph is arguably the replacement of the market-driven Federal Family Education Loan program with the Direct Loan Program next July. In so doing, the $92 billion student loan business will be brought under federal control.
The non-partisan Congressional Budget Office estimates this measure alone will generate $61 billion in savings over 10 years, money that will then be channelled back into education programming and used to increase grants to the neediest students.
In spite of vociferous lobbying from opponents, such as the student loan giant Sallie Mae, many legislators defended this measure. House Education and Labor Committee chair and Democrat George Miller explained: "We can reform the student loan program by taking these wasteful subsidies [to private lenders] and redeem the savings for millions of families and students who want a shot at attending college."
The administration's commitment to low-income students was also seen in the revised Pell Grant program. Although a whittled-down version of its original expression in the earlier act, the grant nonetheless will be fixed at a maximum of $5,550 for the 2010-11 academic year, and guaranteed annual increases will be indexed to inflation.
On the whole, the mood in higher education is cautiously optimistic. Indeed, following the 220-211 vote, Department of Education Secretary Arne Duncan hailed the bill as "a victory for America's students".
Although ratification in the Senate only requires a simple majority of 51 votes, its passage there promises to be anything but simple.
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