College Aid Reform Passes with Health Bill

(AP)  Riding the coattails of a historic health care vote, the House on Sunday also passed a broad reorganization of college aid that affects millions of students and moves President Obama closer to winning yet another of his top domestic policies.

The bill rewrites a four-decades-old student loan program, eliminating its reliance on private lenders and uses the savings to direct $36 billion in new spending to Pell Grants for students in financial need.

In the biggest piece of education legislation since No Child Left Behind nine years ago, the bill would also provide more than $4 billion to historically black colleges and community colleges.

The bill was paired with the expedited health care bill, a marriage of convenience that helped the prospects of each measure. That combined measure passed 220-211.

"We are pairing this historic health reform with another opportunity that cannot be missed - the chance to make the single largest investment in college affordability ever at no cost to the taxpayers," said Rep. George Miller, D-Calif.

The Senate will take up the bill next week under the same expedited rules used for health care legislation. That means the Senate can pass the education measure by a simple majority, virtually guaranteeing its success despite qualms from some Democrats and opposition from Republicans.

House lawmakers passed the bill last year, but in the Senate it did not have 60 votes to overcome a near certain filibuster. By riding shotgun on the fast-track health care bill, the legislation now can avoid that obstacle.

Still, Mr. Obama won't get the Pell Grant expansion he initially sought. Congressional Democrats had to trim their original spending plans when the 10-year savings realized by switching to direct government loans dropped from $87 billion to $61 billion.

Private lenders have conducted an all-out lobbying effort against the bill, arguing it would cost thousands of jobs and unnecessarily put the program in the hands of the government.

America's Student Loan Providers, a trade group representing lenders, called for the Senate to reject the measure. "This is not the final chapter," the group said in a statement. "The Senate now has the historic opportunity to pass health reform - without eliminating thousands of jobs and critical student services."

Under the college lending program, financial institutions provide college loans at low interest rates, the government guarantees the loans in the event of default and subsidizes private lenders when necessary to keep rates low.

"By moving to the federal government's direct loan program, we will put the best interests of students first and make college loans more reliable and affordable," said Rep. Ruben Hinojosa, D-Texas, the chairman of a House higher education subcommittee.

In addition to using the $61 billion in savings from that change for Pell Grants and higher education institutions, the legislation would direct about $19 billion for deficit reduction and to offset expenses in the health care legislation.

Besides increasing Pell Grants, the bill provides $1.5 billion to make it easier for student borrowers to repay their loans. Beginning in 2014, borrowers would be allowed to devote no more than 10 percent of their monthly income to repay student loans. The current cap is 15 percent.

Still, the legislation is not as generous as the bill the House passed last year. The bill had anticipated far more spending on community colleges and had called for increasing the Pell Grants each year by the consumer price index plus 1 percent. Democrats had to scrap the additional 1 percent increase.

Instead, the bill proposes no increases in Pell Grants over the next two years and a modest increase over the five years that follow. The maximum Pell Grant, which a House-passed bill last year would have raised to $6,900 over 10 years, will now only increase to $5,900. The current maximum grant for the coming school year is $5,500.

What's more, a poor jobs market that has driven potential workers to colleges and technical schools has put a strain on the Pell Grant program. Of the $36 billion destined for Pell Grants, $13.5 billion would help fill a $19 billion Pell Grant shortfall.

Following Republican criticism, Democrats dropped a provision in the new bill that would have allowed the state-owned Bank of North Dakota to continue making federally financed student loans to students.

"That's out, end of the story," said Rep. Earl Pomeroy, D-N.D.

More Coverage of Health Care Reform:

Health Care Debate Shows Ideological Split
House Passes Health Care Bill
Obama: "This is What Change Looks Like"
Health Care Vote: How Each Representative Voted
Announcement of the Vote
Boehner Tells Democrats: Shame on You
Pelosi Urges House to "Make History"
Health Care Bill: What's In It?
Short-Term Effect of the Bill
What, Me Worry? Obama Watches Basketball
Stupak Called "Baby Killer" for Backing Bill
CBSNews.com Special Report: Health Care

[6549al]

here's a comment to rimbaud1970 - you state "the government should provide for us" don't tell me you want entitlements. remember government is not the solution it's the problem. only good for the rich, only good to start illegal wars..oh boy are you in the dark. listen, do yourself a favor - throw away all the paper you read and subscribe to the Wall Street Journal. it give the news the way Walter Cronkite used to..........right down the middle no opinions, it let you decide, it's not just a fininacial paper. than perhpas you can make a intellgent comment

[NotaPartyMember]

The difference between the two major American political parties is a simple and profound one. One party wants to control everyone?s personal morals and ethics, while leaving business morals and ethics up to whatever the business thinks. The other party wants to leave the individual?s morals and ethics up to that individual, while controlling a business? morals and ethics. This is the basic difference between the two major American political parties. Everything else either stems from this difference or is mere window dressing, put there to get the masses to go with the party?s flow. If you want to know which party to believe, simply listen to them and then watch their actions. If the two match then you have a good chance of getting what you wanted when you voted.
However, this is as likely to happen as any one person winning the state lottery in different states on the same day. Possible; but who wants to bet their life on it? Oh wait, this is what you are doing with every vote. Political parties keep promises the same way the government kept its promises to the Native Americans. It kept one: ?We will take your land and?? The same for the politicians: ?We will take your money and?? That is about all folks.

[mary-miami]

President Obama is the best leader the U.S. has had in a long time.
He tries to help the working class. The republicans crashed our economy in eight years and it will probably take that long to fix it.
The President will succeed in rebuilding the middle class and will be our next national hero.

[6549al]

great comment about our president however, you must not read the papers or any of our president's history in how or who put us in the terrible mess we are financial. it all started with our president clinton when he took all the restriction off of lenders and banks and gave tham the ok i.e "fair housing act" 1993 - this gave the lenders the oppurtunity to lend to folks who should not, I repete should not have been given a mortage. within 5-8 yrs this went out of control and when the housing market started to crash and all those adjustable mortages went sky high people could not afford them and started to default hence Fannie/Freddie started to eat all those "toxic" mortages and started to lose big $$$$$$$$$$-- this my friend is how the fininacial mess started and if you don't believe that you just watch the program "house of cards" it tells the whole story. do youself a favor an watch and learn, all the presidents from clinton on were no better in trying to stop this. however, in relation to obama, you just watch in the next 5 years how your taxes are going to rise, how do you think they are going to fund obamacare and all the other entitlements he's giving out.

[notareporter]

where do you get your information??????

[facelessvoice]

I hope you don't mind me inquiring where you may be getting your information from. Maybe your informants could enlighten the rest of us.

[eightkidshavei]

It was underhanded of the Democrats to attach this to a bill purporting to reform health care. But then, this whole entitlement only passed the House with unethical arm twisting and back room deals. As our president said, "The process isn't important." I guess the end justifies the means.

[notareporter]

Expedited rules....why can't we call it what it is: a blatant denial of Constitutional rights, abandonment of checks and balances, government for the people without the people having anything to say about it.

[hornsnbr1]

So the Dems took money away from loan programs available to all including middle-class families and gave it to black universities and grants only available to the welfare crowd, what a surprise....

[afmcalax]

See this is another one of the bills the Pro-Family Republican Party would not support. They supported Big Bank profits over afforadable education. They do not want afforadable college educations because the more educated a person becomes the more Democratic they will vote. Keep them stupid and bigoted is the mantra of the Republicans. They may want all of America to have the low wages, poor education, and bad health of their southern brethren, but luckily for Americans the Democrats and Independents aspire to give us more.

[notareporter]

your facts seem a bit skewed. where so you get your information? what other point of view is available to you?

[RobAla]

What else will the federal government take over? More and more of our free society is being taken; and more and more citizens will have to depend on the mercy of non-responsive federal agencies. This is a dark day.

[rimbaud1970]

YAWN! I am so sick to death of this "sky is falling" attitude. We are the government. The government should work/provide some things for us- otherwise what are they good for. Up to now it seems only good for the rich, only good to start illegal wars with my money and only good to deny human rights to the disenfranchised. It's funny, I pay taxes now but I have no idea what I am getting; at least now I'm getting something or helping someone with my tax dollars.

[bradkt1]

This will be another biggie for middle class and poor families that the Democrats will be able to point to.