House Plan to Cut Loan Programs Stalls

Republican leaders lack votes, for now, on budget package that would slash $14.3 billion from lenders and students.
November 11, 2005

Republican leaders in the House of Representatives on Thursday abandoned a planned vote on a budget measure that would cut $14.3 billion from the federal student loan programs, after acknowledging that they lacked the votes to pass it.

College and student groups, which oppose the plan because it would add to students' college costs and use savings from the loan programs for purposes other than higher education, had ratcheted up their lobbying efforts and their rhetoric in recent days and, with many other interest groups that would be affected by the cuts, seem to have had some impact in dissuading moderate Republicans from supporting the plan.

House leaders, though, said they planned to bring the budget package back to the chamber floor next week. "I think we'll have the votes next week," the House Majority Leader, Roy Blunt (R-Mo.), told reporters after five hours of lobbying apparently failed to turn up the necessary votes, even after they made several major concessions (on things such as drilling for oil in Alaska).

The House bill is part of Congress's "budget reconciliation" process, in which it seeks to cut spending on mandatory federal programs to produce savings to cut the deficit and, this year, cut taxes, too. The House measure would slash about $51 billion over all, cutting from food stamps, Medicaid and other programs in addition to the loan cuts.

While the "savings" derived from the student loan programs would come largely, student groups have charged Congress with trying to balance the federal budget on the backs of students at a time of rising tuition prices and loan debt, and several lawmakers noted that they'd heard from students or college officials concerned about the cuts.

Student groups like the United States Student Association and the State PIRGs' Higher Education Project, and the Student Aid Alliance, which is made up of college associations, have hit home with their campaign to "Stop the Raid on Student Aid," although Republican leaders have accused them of exaggerating the impact on students.

On Thursday, the groups expressed relief, for now. "Members of Congress today deserve credit for turning their backs -- albeit temporarily -- on one of the most misguided and misplaced budgets ever brought before the Congress," said Luke Swarthout, of the State PIRG's Higher Education Project. "Congress now has an opportunity to help students out of this deep financial hole by reinvesting the excess subsidies in the student loan programs into aid for students. However, to help students and families out of the hole, Congress must permanently bury this reconciliation bill."

The legislative picture is very complicated, in part because legislation to extend the Higher Education Act, the law that governs most federal college programs, has been bound up in the budget reconciliation process (as, for that matter, has the annual appropriations process through which Congress allocates funds for student aid, biomedical and other research, and other programs important to colleges). The Senate has gone so far as to incorporate its version of the Higher Ed Act legislation into its budget reconciliation bill, but the House has not.

The Senate is intent on concluding its formal work for the year at the end of next week, which means that if budget reconciliation remains stalled in the House, and probably even if the budget measure passes next week, the chances of Congress's passing the Higher Education Act reauthorization this year have been reduced to just about nil.


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