There's good reason why aid administrators' heads may be spinning this morning. The same day that ranking minority members on the House and Senate education committees introduced legislation to extend the Ensuring Continued Access to Student Loans Act (ECASLA), Democratic education leaders sent letters to college presidents urging them to be prepared to deploy the Direct Loan program for the 2010-11 academic year.
Representative John Kline (R-MN), Ranking Republican on the House Education and Labor Committee, and Senator Mike Enzi (R-WY), Ranking Republican on the Senate Health, Education, Labor and Pensions Committee (HELP), announced new legislation yesterday that would extend the Department's authority to purchase FFELP loans through the 2010-11 academic year.
"Today, the damage to our economy demands we continue to take commonsense steps to ensure our nation's student loan lenders have the confidence and capital to continue providing loans to those who are themselves struggling to pay for their education," Kline said in a press release.
"Students must have access to student loans and Congress can make sure that happens by passing this bill," echoed Enzi.
But Democratic education leaders in the House and Senate believe the best way for schools to ensure their students have access to loans next year is to transition into the Direct Loan program, not to extend ECASLA. In a letter to college presidents yesterday, Reps. George Miller (D-CA) and Ruben Hinojosa (D-TX) said that ECASLA was meant to be a temporary, not permanent, solution to stabilize the FFEL program.
"The Direct Loan program, which offers students the exact same loans but is cheaper for taxpayers, has remained insulated from the downturn in the economy and has continued to operate normally for those campuses that use it," wrote Miller and Hinojosa.
Sen. Tom Harkin (D-IA), Chairman of the Senate HELP Committee, also opposes any extension of ECASLA since doing so would change savings estimates that are currently being used to fund increases in the Pell Grant, as well as other higher education and K-12 programs through H.R. 3221.
The House bill to extend ECASLA - sponsored by Rep. Kline - is supported by nine Republican co-sponsors, according to a press release issued yesterday. Sen. Enzi's bill is currently supported by eight Republican co-sponsors, as well as Senator Ben Nelson from Nebraska, a long-time supporter of FFELP and one of only two Democrats to vote against the FY 2010 Budget Resolution that called for the elimination of the guaranteed loan program.
All of this leaves schools wondering: Will there be a FFEL program next year?
No one can say for certain whether Congress will be able to pass student aid reform. Even if Congress fails to pass student aid legislation this year, it is unclear whether FFELP will continue to exist without an extension of ECASLA, which congressional leaders have said they are unwilling to extend. For those reasons NASFAA is recommending that schools prepare for the Direct Loan program not out of a policy position, but to ensure that students will have access to loans no matter what happens.
Media Coverage
GOP Seeks To Continue Treasury Backing Of Student-Loan Market Dow Jones
Student Lenders Rise On Hopes Fed Loan Program Will Survive The Wall Street Journal
Enzi, Nelson, Alexander Move To Protect Student Loans The Chattanoogan
Key Congressman Reiterates Warning to Colleges on Direct Loans The Chronicle of Higher Education
Congress's Dueling Moves Over Student Loans Inside Higher Ed
By Justin Draeger
Vice President of Public Policy and Advocacy
Posted 11/19/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
