(July 2009) On July 21, the House Education and Labor Committee considered and passed the “Student Aid and Fiscal Responsibility Act” introduced by Committee Chairman George Miller (D-CA) by a vote of 30-17. Only one amendment involved Perkins Loans, an amendment by Rep. Rob Andrews (D-NJ) that would exempt new Perkins Loan funds from being counted in the 90-10 rule for proprietary schools. The bill makes the dramatic changes to the Perkins Loan program that were described in the summary we sent you this morning.

According to the Committee, the legislation will generate $87 billion in savings over the next ten years that will be used to boost Pell Grant scholarships, keep interest rates on federal (subsidized Stafford) loans affordable, create a more reliable and effective financial aid system for families, and enact President Obama’s key education priorities.

Four amendments were approved by Committee Members by voice vote to extend access to those funds to special categories of students. The first amendment adopted, offered by Rep. Lynn Woolsey (D-CA), would prioritize low-income, or first-generation, or delayed-enrollment students and students with dependents for competitive educational grants. Rep.Ruben Hinojosa (D-TX) offered one to would extend special funding for historically black colleges under the Higher Education Act until 2019 which was also approved. Two other amendments were approved to extend benefits to service members. The first, offered by Rep. Susan Davis (D-CA), would forgive any loans military members incur while on active duty; and the other offered by Rep. Howard Buck McKeon (D-CA) would give service members more freedom to attend their college of choice under the G.I. bill, by mandating that their eligibility for state-based tuition assistance be calculated against an aggregate of both maximum tuition thresholds and fees.

During his opening statement, George Miller said the bill “will help us reach President Obama’s goal of once again leading the world in college graduates by making college more affordable and accessible. It will invest $40 billion to increase the maximum Pell Grant scholarship award to $5,500 in 2010 and to $6,900 by 2019, linking it to match cost of living increases. It will simplify the FAFSA form to make it easier to apply for federal student aid. It will build on our efforts to make (subsidized Stafford loan) interest rates on loans affordable by making these interest rates variable beginning in 2012 – when they are set to jump from 3.4 to 6.8 percent. It will provide more students with access to low-cost Perkins loans by expanding the program to many more campuses. It will strengthen minority-serving institutions and programs that will help retain and graduate students. Next, it will make an unprecedented $8 billion investment in our community colleges to help them drive our economy’s recovery.”

He added that by converting all new federal student loans to the Direct Loan program starting in July 2010, “we will finally end wasteful taxpayer subsidies that are keeping a broken system afloat and we will insulate all federal college loans for families from future turmoil in the financial markets.”

For more information or to read the bill text visit: http://edlabor.house.gov/newsroom/2009/07/legislation-to-make-landmark-i.shtml#more

This completes formal Education and Labor Committee action on this legislation. The next step will be for the full House to consider the bill, which could come within the next two weeks. Senate Committee action is not expected until September or early October.

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