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Senate SAFRA Timing Remains in Flux, Bishop Speaks of "Likely" Delays in Perkins Changes
(January 2010) Senate HELP Committee Chairman Tom Harkin (D-IA) informed the Washington Post he intends to move the Senate version of SAFRA "early this year" and Deputy Undersecretary Robert Shireman told the Post he was "confident that we'll see movement on this bill." Unfortunately, in another article, the Post reports that Democrats are in a state of "disarray" regarding their 2010 agenda, particularly as it pertains to health care, so the qualified statements of Shireman and Harkin are the closest thing to a definitive word on the timing of Senate SAFRA consideration coming out of Washington right now.

For now, the student loan legislation remains tied to health care and there are several indications that Congress will "take a break" from that issue for at least the next month, if not much longer. Several moderate Democrats in the Senate have spoken out against the use of reconciliation for health care reform, however, and once Leadership has determined the procedural tactic will not be used for health care legislation, the path is cleared for the Senate student loan bill.
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COHEAO Hosts 2010 Annual Conference
(January 2010) The COHEAO Annual Conference took place this week outside of Washington, DC with a series of informative sessions on a variety of topics. The sessions are available at www.coheao.org. In addition, several dozen COHEAO members made visits to their Representatives and Senators in Congress to talk about Perkins Loan proposals and to call for modification of the President's proposals to include school-based servicing, the payment of the in-school interest benefit and continuation of loan cancellations.

Congressman Tim Bishop (D-NY) spoke to the attendees about the upcoming student lending legislation. He indicated that he remains supportive of making some modifications to the House-passed version of the Student Aid and Fiscal Responsibility Act in the Perkins Loan area. Specifically, he supports allowing schools to have the option of servicing the new Direct Perkins Loans and he supports some sort of institutional match. He also remains supportive of restoring some of the in school interest benefit. He had proposed having the institutions cover the in-school benefit instead of providing a match, but he now realizes that this would rapidly become too costly for institutions to manage.
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Student Loans Mentioned in the State of the Union Address
(January 2010) The President delivered his State of the Union Address on Wednesday, outlining his agenda for the upcoming year. Although analysts report education issues were addressed in about five percent of President Obama's remarks, he did use the occasion to urge the Senate to pass the SAFRA legislation and unveil a revised version of the Income-Based Repayment program. The revised IBR would limit student loan payments to 10 percent of income after certain adjustments and reduce the time needed to have the balance forgiven from 25 years to 20 years. Direct Loan borrowers in public service jobs would still be eligible for forgiveness after making 10 years of payments. COHEAO members interested in our memos providing further details on the State of the Union and the President's FY2011 Budget should email Wes Huffman (whuffman@wpllc.net).
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Health Care Debate Still Holding Up Student Loan Bill
(December 2009) For some time the conventional wisdom has been the student loan and health care debates are tied together because of a Senate procedural rule known as budget reconciliation. Now that the Senate appears determined to pass the health care legislation through regular order, logic would suggest the path has been cleared to begin work on the student loan bill.

However, as the outcome on health care is far from decided, the full Senate is unlikely to consider the student loan legislation until next year. Rumors are flying around Washington of imminent action on student loan reform legislation, but a bill has yet to be introduced, a markup in the HELP Committee has yet to be announced, and there are very few days left on the legislative calendar.
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Perkins Loan Changes Likely To Be Delayed One Year ED Official Says
(December 2009) Legislation making major changes to the Perkins Loan Program, including creating a new Direct Perkins Program and eliminating the current program, will likely not take effect until July 1, 2011, according to a statement made by Acting Assistant Secretary of Education Dan Madzelan at the ED Office of Federal Student Aid Conference in Nashville this week. It is up to Congress to decide whether or not to approve a change to Perkins and to set the date the change takes effect, a fact Madzelan noted, but he indicated near certainty that there would be a delay.
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Sen. Franken Discusses Perkins at Town Hall Style Meeting
(November 2009) Sen. Al Franken (D-MN) spoke at an event with students, campus administrators, and faculty on the campus of the Minnesota State University Moorhead (MSUM) this week. To begin the event, students spoke of their frustration with student debt levels and Franken followed up by mentioning the Pell Grant increase in the President's plan for federal student aid.

Campus administrators also got the opportunity to ask questions and COHEAO Board Member Larry Rock of Concordia College spoke up with his concerns with the elimination of the in-school interest subsidy and unique loan forgiveness aspects of the Perkins Loan Programs. Franken responded that he agreed with Rock on these issues and would be looking to ensure their inclusion in the student loan reform bill in the Senate.
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House Passes SAFRA
(September 2009) On September 17, the House of Representatives completed debate, voted, and passed HR 3221, the Student Aid and Fiscal Responsibility Act of 2009 by a vote of 253-171. The vote was primarily among party lines, however four Democrats voted against the bill: Rep. Allen Boyd (FL), Rep. Stephanie Herseth-Sandlin (SD), Rep. Paul Kanjorski (PA), and Rep. Mike McMahon (NY). The primary components of the bill include the elimination of the FFEL program, increased spending on Pell Grants, spending on new higher education and Pre-K-12 programs. No substantive changes to the Perkins Loan provisions were made during the full House consideration of the bill yesterday and today. Changes to the Perkins Loan program include an increase in available loan funds, but also the removal of the in-school interest subsidy, of cancellation benefits and the transfer of the administration of loan servicing and collections to the Department of Education as a new version of a direct loan.
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