November 18, 2005

Early today, the House of Representatives passed the Deficit Reduction Act of 2005 (H.R. 4241) on a vote of 217-215. The legislation only includes changes to the Higher Education Act that impact federal spending during the next five years, mainly changes to the FFEL and Direct Loan programs. Most of the savings are derived by reducing what FFELP lenders make and imposing new fees on lenders; it does not include the broad Higher Education Act (HEA) reauthorization legislation that was approved by the Education and Workforce Committee as H.R. 609.

The Perkins Loan Program is not mentioned except for a provision expanding loan cancellations for military personnel. Because the Senate has already passed its HEA reauthorization bill as part of its budget reconciliation, S. 1932, Higher Education Act reauthorization may be considered as part of a House-Senate conference to resolve differences between the two versions of the Deficit Reduction Act. However, it is not clear if that will be the case or if the rest of the HEA reauthorization, including reauthorization of the Perkins Loan Program, will be done separately.

Conference negotiations on the legislation are expected to commence in the near future, but there is no exact timetable on when a conference agreement will occur.

Andrew Stringer
Legislative Associate
Washington Partners, LLC
(P) 202-289-3903
(F) 202-371-0197
astringer@wpllc.net