(May 2009). Last week, the House Education and Labor Committee’s held two hearings directly related to the Obama administration’s student loan proposals. Secretary Arne Duncan discussed the administration’s overall education agenda with the Committee on May 20, and a hearing specifically addressing student loan reform, “Increasing Student Aid through Loan Reform,” was on May 21. 2009.

COHEAO submitted written testimony for the Members at the hearing on May 21.. The testimony emphasized the importance of the Perkins Loan program and the various benefits the program provides to students including a low-interest rate, a nine-month grace period, no origination or guarantee fees, a10 year repayment and multiple loan cancellations for service employment.

COHEAO urged Congress to retain the current subsidized Perkins Loan Program and included the COHEAO proposals moving forward which included expanding the program to more students and schools; retaining the institutional match; allowing schools to continue loan collection; and retaining the public service cancellation benefits. To view the COHEAO testimony click HERE.

Secretary of Education Arne Duncan was before the committee on Wednesday to discuss the administration’s full P-16 education agenda, and most of his testimony and the questions from lawmakers focused on education issues pertaining to pre-K through high school.

On Thursday, May 21, seven witnesses, five selected by Democrats and two selected by Republicans, testified before the committee on the administration’s plan, and in some cases, on their own proposals for the future of federal student lending.

At the hearing, any doubt about the intention of the Education and Labor Committee majority to proceed with the termination of the FFEL program in its current form was eliminated. Chairman George Miller (D-CA) opened the hearing by explicitly endorsing the concept of using student loan reform budget “savings” to fund additional Pell Grants. While he also indicated he was willing to look at alternatives, he also said any such alternative must produce significant budget “savings.”

The administration has made a concerted effort to bring the student loan issue to the forefront, including several mentions of this issue from the President himself. Like many issues before the Congress, the Democrats charged with drafting the student loan reform legislation are largely aligned with the President’s agenda, but they may want to make tweaks aimed at improving his proposal.

“There has been a suggestion that this is all a 'done deal,'” Miller said. “There is agreement that there is a serious cost to the way this program has been run, but what we do about that is an open question for members of this committee…Of course, I haven't gotten in the habit of telling President Obama no yet....”

For more information on the hearing, including witness testimony and Member statements, video clips, and an archived webcast, visit: http://edlabor.house.gov/hearings/2009/05/increasing-student-aid-through.shtml

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