Student Loan Blog : Senate

Colleges and Students Could Benefit From Pending Federal Bailout

Student Loan Girl — Wed, 21 Jan 2009 23:37:00 GMT

It seems that everyone is getting a piece of the government’s “bailout pie,” including banks, automakers, and perhaps even the nation’s colleges and universities, although exactly how much schools will get and when they will get it has not yet been established, reports Inside Higher Ed (“Manna From Heaven (er, Washington),” Jan. 16, 2009).

While provisions of an $825 billion stimulus package bill drafted by House Democrats earlier this week could change significantly before the bill is ratified by both houses of Congress — the Senate is reportedly in the process of writing its own version of the bill — a rough estimate by Inside Higher Education suggests that colleges and their students could end up benefiting to the tune of tens of billions of dollars in several areas:

Student Aid: $30 billion Nearly $15.6 billion would be used to increase Pell Grant awards by $500 per recipient to $5,350, a move that would help about 800,000 students in the 2009–10 school year and would wipe out the $1.4 billion shortfall projected for next year’s Pell Grant program budget. Some $12.5 billion of the bill would be used to increase the limit on federal unsubsidized student loans by $2,000 and to replace the HOPE Tax Credit with a restructured tax credit worth up to $2,500 to benefit low-income families.
College Grants: $4 billion Community colleges and for-profit schools could receive as much as $4 billion in the form of grants for adult education programs, so that these students may be able to receive career-related or job-education training. Some funds could also be allocated to states in the form of bonds that local governments could use to create “recovery zones” to help those individuals who reside in areas suffering from high unemployment or foreclosure rates.
College Infrastructure: $8.7 billion About $6 billion would be used for “higher education modernization, renovation and repair” and would be distributed to states based on the number of full-time undergraduates attending state institutions. Some $2.7 billion would be allocated to renovate, update, and modernize biomedical research facilities and upgrade equipment, with funding priority given to colleges that “serve high numbers of minority students” or “institutions impacted by a major disaster.”
State Aid: $39 billion A portion of this estimated $39 billion would be given to state governments “to help restore cuts to critical education programs,” including those in higher education. Some of these funds may be used to “restore state support for postsecondary education to the fiscal year 2008 level.”
Academic Research: $8 billion Some $2 billion would be allocated for research on energy efficiency and renewable energy along with $1.9 billion allocated for basic energy studies. An additional $2 billion would go to the National Science Foundation, $1.5 billion would be used by the National Institutes of Health for biomedical research, and $400 million to be used by NASA for climate-change research.

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Student Loan Providers May Get Government Help for One More Year

Student Loan Girl — Thu, 18 Sep 2008 00:08:00 GMT

With problems in the credit markets continuing to plague student loan providers, the U.S. House of Representatives overwhelmingly approved a year-long extension of the Ensuring Continued Access to Student Loans Act, which allows the secretary of education to buy student loans from cash-strapped lenders.

If approved by the Senate, the measure, which Congress originally passed last spring, would extend the education secretary’s loan purchasing power through July 1, 2010 to help ensure that students have access to federal student loans for the 2009–10 academic year. The bill was set to expire July 1, 2009.

The act gives the Department of Education the authority to buy student loans from third-party private lenders in the Federal Family Education Loan Program who have been unable to sell their loans to investors following fallout from the subprime mortgage crisis.

“Our rough economy is already dealing a huge blow to American families and we can’t allow trouble in the credit markets to further price students out of a college degree,” said Rep. George Miller, D-Calif., chairman of the Committee on Education and Labor (“House Moves to Protect Student Loans,” Associated Press, Sept. 15, 2008).

“With market conditions showing no signs of letting up,” Miller added, “it’s only prudent to make sure that students have every assurance that the federal student loans they need will be there next year.”

The measure would also extend the secretary’s authority to advance federal funds to guarantee agencies so those agencies can make loans, if necessary, as a “lender of last resort” for the nation’s colleges and universities.

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New Senator at the Helm of Higher Education Act Negotiations

Student Loan Girl — Tue, 03 Jun 2008 23:13:00 GMT

Sen. Barbara Mikulski, D-Md., will “pinch hit” for Sen. Edward Kennedy, D-Mass. — the chairman of the Senate Committee on Health, Education, Labor and Pensions who is recovering from surgery to treat a malignant brain tumor — in Senate and House negotiations to overhaul the Higher Education Act (HR 4137 and S 1642).

Mikulski, the third-most senior Democrat on the Senate committee, will handle the member-to-member negotiations between education leaders in the Senate and the House of Representatives, according to an article in CQ Politics (“Doctors Say Kennedy Brain Surgery Successful,” June 2, 2008).

Both sides are working to merge two Higher Education Act versions passed separately by the House and the Senate last year.

In mid-May the two houses had reached a compromise on college cost watch lists, college accreditation, and campus piracy, but that draft of the measure did not include provisions on graduate education, new programs, or private student loans.

It is unclear when Kennedy, who has worked to ensure undergraduates have access to student loans amid instability in the student loan credit market, will return to the Senate.

Kennedy underwent surgery June 2, for a malignant glioma, an aggressive tumor of the central nervous system, and will receive chemotherapy and radiation treatment over the next few weeks.

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