The Congressional Budget Office (CBO) released a cost estimate for the Student Aid and Fiscal Reponsibility Act (SAFRA). Overall, the legislation would reduce direct spending by $13.3 billion over the 2009-2014 period and $7.8 billion over the 2009-2019 period; these savings would be used for deficit reduction.
Eliminating student lending under the Federal Family Education Loan (FFEL) program and shifting an estimated $705 billion in loans to the Direct Loan (DL) program beginning July 1, 2010 would save $41.8 billion over the 2009-2014 period and $86.8 billion over the 2009-2019 period.
Changes in the Pell grant program (base remains discretionary subject to appropriation, while mandatory component is increased by CPI plus 1%) would increase direct mandatory spending by $10.4 billion over the 2009-2014 period and $39.4 billion over the 2009-2019 period. Assuming the discretionary amount remains $4,860, the CBO estimates the mandatory award will grow from $690 in 2010 to $2,040 in 2019.
The full cost analysis is available at CBO online. Bill text and the House Education and Labor Committee report are also available at the Library of Congress online.
The full House will consider the bill after August recess. The Senate Health, Education, Labor, and Pensions Committee is expected to introduce a similar bill.