SAFRA approved to loan directly to students
On Tuesday, President Barack Obama transformed the way the government helps students pay for college education by signing into law the final changes to the reconciliation bill containing the student loan and the health care reforms.
The two bills were packaged together so both measures could use budget reconciliation, which requires a simple 51-vote majority to pass and also prevents a filibuster. Last year, the House of Representatives’ budget committee gave instructions to use reconciliation on the student loan bill, but since the process may only be used on one bill per year, the two pieces of legislation were packaged together.
The Student Aid and Fiscal Responsibility Act allows the federal government to loan directly to students instead of subsidizing private financial institutions that serve as middlemen. In total, the switch saves $61 billion over the next 10 years. From these savings, $10 billion will be invested to reduce the deficit, while the remainder funds higher education, according to the Congressional Budget Office.
“(The law) makes the single largest investment in higher education in history while also reducing the deficit,” said Rep. Henry Waxman of California’s 30th district, which
