White House Backs Student Aid Bill It Helped Craft

September 16, 2009

The White House did the unsurprising Tuesday: threw its weight behind House of Representatives legislation that would carry out several of President Obama's key higher education priorities. The Statement of Administration Policy issued by the Office of Management and Budget formally endorsed H.R. 3221, which would essentially end the lender-based guaranteed student loan program and use tens of billions of dollars in savings to increase funds for Pell Grants, a new community college initiative and other programs. The House could begin debating the legislation today. Education Secretary Arne Duncan had already backed the legislation when it was passed by the House Education and Labor Committee in July, and administration officials worked closely with House Democrats in crafting it. The White House statement takes issue with a few aspects of the measure, suggesting that it does not inject enough money into the Pell Grant Program and urging members of Congress to "strengthen accountability and transparency for institutions voluntarily choosing to participate in the College Access and Completion Innovation Fund," which would provide $3 billion to encourage states to invest in programs that improve college going and graduation. While some lenders still hold out hope that the Senate will challenge the administration's push for 100 percent direct lending, many observers believe that ship has sailed. The biggest fights going forward are likely to be over the college access fund -- whether the money flows through competitions or in block grants, whether it flows to state agencies or institutions, and whether private colleges can qualify for funds without sacrificing their independence.

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