In an effort to push legislation through before the holidays, the U.S. Senate passed a budget measure late on Dec. 21 that would cut $40 billion from mandatory spending programs, with almost one-third of the cuts coming from student loan programs.
The landmark 51-50 vote — with Vice President Dick Cheney breaking the tie — approved the bill, which has been vigorously opposed by students and higher education advocates for its $12.7 billion cut to student aid. It’s a price that students should not have to pay to reduce the federal deficit and lower taxes, according to UC spokesman Chris Harrington.
After its passage in the Senate, Democratic opponents offered a “point-of-order” objection because of changes made to the bill after it passed with a 212-206 vote in the House of Representatives, including two provisions authorizing policy reports and another more significant provision that limits lawsuits against hospitals that seek to require Medicaid patients to pay for non-emergency care in emergency rooms.
The bill will now return to the House for further consideration, and will face its final vote Feb. 1.
“The last vote on budget reconciliation took place in the early morning hours with supporters of the bill hoping to face little scrutiny due to the holidays and recess,” stated according to United States Student Association Legislative Director Jasmine L. Harris. “Recall that the House passed the budget reconciliation bill by a slim margin, with 16 members not present for voting.”
Sen. Lamar Alexander (R-Tenn.) emphasized the bill’s critical role in reducing the federal deficit, the first comprehensive budget reconciliation measure since 1997.
“The higher education provisions in this bill are an important step toward providing the skills necessary for America to keep its competitive edge in the world,” Alexander stated in a press release. “This bill achieves our deficit reduction targets while demonstrating a commitment to higher education.”
Loan forgiveness for special education, math and science teachers who teach in low-income schools, loan deferment of up to three years for active-duty military personnel and the reduction of loan origination fees were a few of the provisions Alexander noted.
“I would say students and college groups lost big time on this bill,” UCSD Financial Aid Director Vincent De Anda said. “Generally, it will cost students more to obtain loans and to retire the loan obligation. There are some pluses and some students will benefit.”
The bill includes higher interest rates for student loans. Parent PLUS loans, currently at a 7.9 percent fixed interest rate, will increase to 8.5 percent. College groups now plan to continue lobbying the House in hopes of blocking the legislation once again.
“The university, as well as the broader higher education community, continues to review this legislation to gauge the full impact on our students and universities,” Harrington stated.
The USSA plans to continue efforts to increase the pressure on House members for the last vote, and sees the delay as a victory, according to Harris.
Lobbying has, and most likely will be, a losing effort, De Anda said.
“[College lobbyists are] not very optimistic, but they are still trying,” De Anda said. “It’s my understanding that the [Senate] changes were only small technical ones and the House will accept them and move on.”
Provisions in the latest bill version included an additional “merit” Pell grant added for freshmen and sophomores.
Also, upperclassmen majoring in specific technical fields may qualify for additional Pell grants, according to De Anda.
PLUS loan eligibility would also be extended to graduate and professional students.
