The Latest on Student Aid Reform
The National Association of Student Financial Aid Administrators has agreat post up this morning highlighting the status and predicted content of the joint health care/student loan bill that is now working its way through Congress. It also has this really helpful chart to plot the progress of the legislation:
NASFAA Reconciliation Tracking
While progress on the bill is good news, other reports are pretty disappointing. As promised, the bill would eliminate subsidies for the bank-based student loan program and turn to 100 percent direct lending—a move that would save $68 billion according to the Congressional Budget Office (CBO). Of that, about $6 billion would go to covering increased administrative costs for the direct loan program and an unspecified portion will have to go to deficit reduction.
After that is where the real changes show up. While the bulk of savings will be directed to increasing Pell Grants, earlier versions of the legislation included exciting programs aimed at improving college completion, helping community colleges, ensuring quality early childhood education, and a number of other purposes. Now, it’s looking like savings will only be used for Pell Grants, providing formula funding for minority serving institutions, and some health care spending.
The potential for enacting better loan policy and increasing grants is certainly a welcome move, but I have to admit feeling somewhat disappointed at the potential loss in funds aimed at postsecondary completion and community colleges. (Others have also expressed some disappointment here and here.) It’s a