This information advisory contains an update on:
- Federal Budget and Appropriations
- Student Loan Legislation
- Higher Education Act
- New AASCU Legislative Action and Policy Center
Budget and Appropriations Update
While it is very unlikely that an approximately $3 trillion fiscal year 2009 federal budget will be completed by the start of the federal fiscal year (October 1, 2008) or even by the end of the calendar year- resulting in the government operating on a Continuing Resolution (CR)- Congress continues to move through the budget process. Congress is also working on an “emergency supplemental” – which for the past several years has funded the wars in Iraq and Afghanistan.
Fiscal Year 2009 Budget and Appropriations
A conference committee is expected to meet this week to continue to iron out differences between the House and Senate fiscal year 2009 budget resolutions. Among other issues of difference, such as tax revenue assumptions, the House and Senate bills are $3.8 billion apart in discretionary funding. The budget resolution, while non-binding, is used as a framework for spending limits in appropriations bills. Budget law requires the completion of a budget resolution by April 15; this deadline is rarely met.
Emergency Supplemental Bill
While the White House has made it clear that any supplemental bill passed by Congress above what the President requested (approximately $110 billion) will be vetoed, House Democrats are moving forward with a bill that contains additional domestic spending, including consideration of an amendment that would expand veterans’ education benefits at a cost of $720 million in the first two years. AASCU is supportive of the inclusion of funding for veterans’ education benefits in the supplemental bill and joined with several education groups in a letter of support to Congress. While the Senate is first taking their supplemental bill through committee, the House will take its bill and amendments (including veterans’ education benefits) directly to the House floor.
Student Loan Bill
President has signed into law a bill passed by the House and Senate (H.R. 5715) in response to shifts in the student loan markets. While there are no reports of any eligible students or parents being denied a federal loan, Congress and the White House believed it prudent to be prepared for any sudden or drastic shifts in the markets that could affect access to federal student loans. The new law:
- Increases unsubsidized student loan annual limits by $2000 and sets aggregate limit on loans at $31,000 for dependent undergraduates and $57,500 for independent undergraduates.
- Gives parent borrowers of PLUS (Parent Loan of Undergraduate Students) a deferment option on loan principal repayment for up to six months after the student becomes less than half-time.
- Allows certain delinquencies on mortgage payments to qualify as an “extenuating circumstance” in order to qualify for PLUS loans.
- Modifies the current “Lender of Last Resort” (LLR) program to:
- Allow parents to qualify for LLR program.
- Authorizes Secretary to approve an entire institution to participate in LLR.
- Authorizes the US Department of Education to act as a “secondary market” to purchase FFEL loans from lenders.
- Directs the Comptroller General to conduct a five-year study and report to Congress on the effect increases in students loan limits have on the cost of attending college and the use of private educational loans.
- Revises eligibility for Academic Competitiveness Grant and SMART Grants. There is some concern expressed by the US Department of Education that while Congress intended to expand access, some changes may affect ability of some students to qualify. The specifics of this concern are unknown at this time and AASCU will be monitoring the situation.
In addition to a letter to Congress providing recommendations on these issue, AASCU joined in a community letter in support of the legislation. Despite continued concerns regarding increases to student loans and the removal of an AASCU-recommended policy proposal in the Senate version of the legislation that would have enhanced the Pell Grant program, AASCU supported efforts to shore up the federal student loan programs as a precautionary measure. See previous advisory on this issue.
Higher Education Act Extension
Despite hopes of finishing a complete reauthorization of the Higher Education Act (HEA) by the end of this month, Congress has once again passed a one-month extension of current HEA law through the end of May. If Congress does not complete the reauthorization process by the end of May, it is expected that Congress will pass another extension.
See the most recent AASCU advisory on the reauthorization of HEA.
New Website Resources
AASCU government relations staff have been working to update and improve web content for AASCU members through an AASCU Legislative Action and Policy Center -- your source for federal legislation affecting higher education, advocacy efforts, state policy resources, and Congressional directory information. Visit the new site and offer suggestions and feedback!