On August 17, by a near party line vote, the House of Representatives passed HR 3221, “the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA),” providing President Obama with an initial victory on his education priorities.  Funded by savings generated from replacing the bank guaranteed student loan program with the Federal Direct Student Loan program, HR 3221 would:

• increase the maximum Pell Grant award to $5,500 for FY 2010, and incrementally increase the maximum award to a projected level of $6,900 by 2019;
• provide a variable interest rate of no more than 6.8 percent per year on most federal student loans beginning in 2012;
• expand and modify the Perkins Loan program to provide a more widely available alternative to private bank loans for students;
• extend mandatory funding through 2019 for programs that benefit minority-serving institutions such as Hispanic-Serving Institutions (HSIs) to help students attain degrees in Science, Technology, Engineering, and Mathematics (STEM) fields;
• create a new five-year, $600 million per year Access and Completion fund to increase the pursuit of and persistence in postsecondary education for underserved populations; and
• simplify the Free Application for Federal Student Assistance (FAFSA) by eliminating questions relating to assets. 

The bill would also fund modernization and repair of public school and community college facilities, early education reform, and a new community college initiative, while putting $10 billion aside for deficit reduction.

A number of minor amendments were approved on the House Floor.  Those of interest to the CSU include:

• Language offered by the Committee Chair George Miller (D-Martinez) to clarify that both part-time and full-time students are eligible to receive a second Pell Grant award in an academic year to pursue year-round studies, designed to correct a proposal by the Department of Education that would only benefit full-time students; and
• An amendment to provide grants to institutions of higher education to hire Veterans Resource Officers to link students with Department of Veterans Affairs mental health care providers under the new Model Programs for Centers of Excellence for Veteran Student Success program.

While the higher education community generally favors many of the provisions contained in HR 3221, concerns remain regarding the predominant role played by states in the proposed Access and Completion Fund and changes to the Perkins Loan program, including a general shift away from serving low-income students, a reduction in loan forgiveness provisions, and institutional cost-sharing provisions.

A Senate companion to SAFRA has yet to be introduced, though the Senate Health, Education, Labor and Pensions (HELP) Committee could release draft language as early as this week.