NACAC Legislative Update

March 20, 2010

Student Aid Legislation Update 
Student loan reform will likely be included in a healthcare - student aid reconciliation bill later this week. Last week, House Education and Labor Committee Chairman George Miller (D-CA) held a press conference on the urgent need include student aid provisions as part of reconciliation. In his statement, he said: "Here's the choice. We can continue a student loan program that the Congressional Budget Office has documented will waste tens of billions of dollars over the next 10 years on a titanic boondoggle in excess subsidies to some of the nation's rich and most powerful banks. Or we can... invest tens of billions of dollars in the Pell Grant scholarship. For millions of Americans, Pell Grants are the pathway to prosperity."  

Education Secretary Arne Duncan, Senate Health Education Labor & Pensions Committee Chairman Tom Harkin (D-IA), and Chairman Miller are expected to publicly announce student aid legislative language today or tomorrow.

Reports indicate that student aid reform in a reconciliation bill will not include all provisions of the Student Aid and Fiscal Responsibility Act (SAFRA), which passed in the House last fall. We anticipate seeing the following in the upcoming legislation:

• Elimination of the Family Federal Education Loan (FFEL) program for savings of $67 billion in savings;
• Payment of a portion of the Pell Grant program shortfall and automatically increase the maximum Pell Grant by the Consumer Price Index (CPI), not CPI plus 1% as stated in SAFRA; and
• Exclusion of the following SAFRA provisions: Perkins Loan program overhaul, American Graduation Initiative sending $10 billion to Community Colleges, and $3.5 billion College Access and Completion Fund.

While it is anticipated that this moderate version of SAFRA will garner more widespread support, education associations are awaiting final language before stating positions on the reconciliation legislation. 

NACAC sent a message to all Congressional members yesterday supporting the investment in the Pell Grant program. We stated: "School counselors, college and university professionals, and especially students are supportive of opportunities to improve college access and success. We urge you to keep them in mind when considering this historic investment in financial aid by ensuring the Pell Grant will continue to keep pace with inflation." 

The Committee for Education Funding, of which NACAC is a part, sent a letter urging inclusion of mandatory Pell Grant funding in the reconciliation bill. The letter noted: "Without this funding, every Pell Grant recipient will see their grant cut by at least $2,500.... These cuts will impact over 6.3 million deserving students throughout the nation." 

In addition, The Institute for College Access & Success, an organization with whom NACAC frequently partners on financial aid issues, issued a statement highlighting the opportunity for student loan reform: "The fact is that collegs that account for 96 percent of all student loans have either switched or are in the process of switching [from FELL] to Direct student loans, because they can't depend on the other 'guaranteed' student loan program's functioning after this June, when the emergency legislation propping it up expires." 

NACAC will continue to monitor developments and share them with members.

NACAC Urges House Members to Support ESSCP 
Last week, NACAC sent a letter to House of Representative members requesting they sign on to a letter in support of the Elementary and Secondary School Counseling Program (ESSCP). The Obama Administration's fiscal year 2011 budget proposes consolidation of ESSCP into a funding stream called Successful, Safe, and Healthy Students with five other existing programs.  

Mindful that consolidation will likely compromise program integrity, Representatives James Langevin (D-RI) and Vern Ehlers (R-MI) have generated a Dear Colleague letter asking other Congressional members to sign on to a letter to Appropriations Committee Chairman David Obey (D-WI) and Ranking Member Todd Tiahrt (R-KS) urging them to provide $55 million in funding for ESSCP, effectively stating opposition to consolidation of the program. The letter to appropriators, circulated to the House by NACAC and Representatives Langevin and Ehlers, states: 

"The ESSCP is the only federal program devoted to the creation and expansion of counseling programs in our nation's schools. For the 2007-08 school year, this program provided support services in 97 school districts in 22 states. The need for counseling services at both the elementary and secondary school levels is clear, but the ability of school-employed counseling professionals to assist students in need is hindered by extraordinarily high student-to-professional ratios." 

NACAC has advocated for increased funding for Elementary and Secondary School Counseling Program (ESSCP) during budget and appropriations processes for many years and will continue to do so. 

Congressional Budget Office Releases Preliminary Analysis of FY 2011 Budget Proposal 
The Congressional Budget Office, a mandated office that aids in economic and budgetary decisions, has released its Preliminary Analysis of the President's 2011 Budget based on the assessment of the budgetary outlook for 2010-2020. Of interest to NACAC members, CBO notes the following President's proposals and associated costs:

• Pell Grant program: Replacing the existing discretionary appropriation funding for Pell grants with new mandatory spending, increasing the maximum award based on inflation for future years beginning in 2011, and making changes to the formulas that determine eligibility for grants would cost $197 billion over the next 10 years, and
• Elimination of the Federal Family Education Loan (FFEL) program: Replacing guaranteed loans with Direct Loans (DL) made by the Department of Education, estimated to have a lower cost per dollar loaned than the guaranteed loan program has, would yield budgetary savings totaling $67 billion over the 2011-2020 period.

The full CBO report is available online. This report is a preliminary analysis; detailed analysis is estimated to be published later this month.  

Department of Education Releases Blueprint for ESEA Reauthorization
The Obama administration released its blueprint for revising the Elementary and Secondary Education Act (ESEA). The blueprint indicates states would be asked to adopt college- and career-ready standards and create accountability systems measuring student growth toward meeting the goal that all children graduate and succeed in college. NACAC is reviewing the blueprint and will provide analysis and response in the coming days. The blueprint and President's discussion are available online.  

NACAC Members in Action
The NACAC Member Action page features advocacy efforts at the state level. We are currently featuring a dozen affiliate advocacy events. Details about the event, including speakers, hill visits, and advocacy document can be found here.   

Find legislation in your state that affects your job and the students you serve: NACAC's State Legislative Portal.