Congress to Consider Budget Resolutions With Implications for Student Loan Programs

Members of the U.S. House and Senate this week are scheduled to take up resolutions setting the broad parameters for spending and taxation for the fiscal year that begins Oct. 1. The proposals before the two chambers differ on how they would affect federal student loan programs.

House Budget Committee
The version approved by the House Budget Committee on March 25 includes a “budget reconciliation” instruction to the House Committee on Education and Labor to produce savings of $1 billion during the next five years through legislative changes affecting programs under the committee’s jurisdiction.

The instruction could be a vehicle to implement the administration’s proposal to replace the Federal Family Education Loan Program with direct government loans. In fact, following the budget panel’s action, Rep. George Miller, D-Calif., chair of the Education and Labor Committee, issued a statement confirming that the budget reconciliation instruction would be used “to enact student loan reforms.”

During the House panel’s consideration of the budget resolution, the committee, on a straight party-line vote, rejected an amendment offered by Rep. Cynthia Lummis, R-Wyo., that would have prevented the budget instruction from being used to eliminate the FFELP. In addition, the budget committee did include a statement in the resolution urging the education committee to “maintain a role for FFELP lenders in the student loan program … and minimize the disruption to students and employees of FFELP lenders.”

Senate Budget Committee
The version of the budget resolution approved by the Senate Budget Committee on March 26 contains no instruction similar to that recommended by the House panel.

If the differences in the two resolutions are reflected in the final versions approved by the full House and Senate, a conference committee will develop a compromise resolution.

Using the budget reconciliation process to effect changes in the student loan program would enhance the prospects for passage because reconciliation bills need only a simple majority to pass the Senate and they cannot be stopped by a filibuster, which requires 60 votes to end debate.

Even if there are no reconciliation instructions affecting student loans in the final budget resolution, the administration’s student loan program proposals still could proceed in Congress under the regular legislative process.