3/23/10

The Health Care and Education Affordability Reconciliation Act of 2010

As you may already be aware, H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010 - which combines proposed legislation for both healthcare and education reform, including student lending - was passed by House lawmakers. Among other provisions, the reconciliation bill would provide:

• Elimination of new lending under the FFELP beginning July 1, 2010.
• Mandatory funding to increase the maximum Pell Grant based on the Consumer Price Index beginning in the 2013-2014 award year and ending in 2017-2018.
• $13.5 billion to reduce the current Pell Grant shortfall.
• $2.55 billion in funding for minority-serving postsecondary institutions.
• $750 million additional funding for College Access Challenge Grants through 2014.
• $50 million to the U.S. Department of Education to help colleges transition to the Direct Loan program.
• $2 billion for career training programs at community colleges.
• Changes to the income-based repayment plan (IBR) for new borrowers beginning in 2014, under which the ceiling for borrower payments would be reduced from 15% to 10% of discretionary income and the timeframe for debt discharge would be reduced from 25 years to 20 years.
• A one-year window allowing in-school Direct consolidation for students with a mix of FFELP, PUT or Direct loans.

It's important to remember that H.R. 4872 is now headed to the Senate for consideration, where up to 20 hours of debate and unlimited amendments are allowed.

We’ll continue to monitor the progress of student loan legislation and keep you informed of new developments. Visit our Legislation Page to view new documents as they become available.

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