Student Aid and Fiscal Responsibility Act (SAFRA) 

Provisions of the Student Aid and Fiscal Responsibility Act (SAFRA) were included in the Health Care and Education Reconciliation Act (HCERA) of 2010, which was signed into law by President Obama on March 30, 2010. The legislation makes college more affordable for millions of Americans, at no new cost to taxpayers. The Congressional Budget Office estimates the legislation would generate $61 billion in net savings over the next 10 years by ending the Federal Family Education Loan Program. The reconciliation bill directs those savings to students and families by:

• Investing $36 billion over 10 years to increase the maximum annual Pell Grant award to $5,550 in 2010 and to $5,975 by 2017. Starting in 2013, the award will indexed at the Consumer Price Index and increase with costs-of-living. This includes an investment of $13.5 billion to fund the shortfall due to increased Pell Grant demand;
• Investing $750 million to bolster college access and completion support for students, part of which will increase funding for the College Access Challenge Grant program;
• Making federal loans more affordable for borrowers to repay by investing $1.5 billion to strengthen an Income-Based Repayment program. New provisions would lower the monthly cap to just 10 percent (currently 15 percent) of discretionary income for new borrowers after 2014; and
• Investing $2 billion in a competitive grant program for community colleges to develop and improve educational or career training programs.

In addition, the SAFRA directs $10 billion of savings back to the U.S. Treasury toward deficit reduction.

Implementation Resources

NACAC Briefing Room: SAFRA: Pivotal Shifts in College Access

Direct Loan Transition Q&A

Federal Student Aid:
Direct Loan Source Newsletter
Getting Started - School New to Direct Loans
Direct Loan Guidance
Direct Loan Webinar Series

Legislative Resources

HR 4872 (HCERA) Summary, American Council on Education

Chairman George Miller's (D-CA) Statement on HCERA, House Education and Labor Committee

HCERA Statement and Supporting Documents, House Education and Labor Committee

Obama Administration Support Statement

Report to Congress: The Student Aid and Fiscal Responsibility Act of 2009, Congressional Research Service

Loan Resources

NACAC: Fact Sheet on Direct Loans

Department of Education Direct Loan Web Page

NACAC: Balancing Acts: How High School Counselors View Risks and Opportunities of Student Loans

Report on Direct Loan Capacity, U.S. Department of Education's Office of Inspector General

Report: Cost Estimates for Federal Student Loans: The Market Cost Debate, New America Foundation

Legislation

HR 4872 (Health Care and Education Reconciliation Act) Bill Text

HR 3221 (SAFRA) Bill Text

House Education and Labor Committee Report on HR 3221

House Education and Labor Committee Legislation Summary

NACAC Communications

Committee for Education Funding Letter Urging Senate Support for Reconciliation Bill

Coalition Letter of Support for Reconciliation Bill

NACAC Statement of Support for Reconciliation Bill

Committee for Education Funding Letter Urging House Include Mandatory Pell Grant Funding in Reconciliation Bill

Coalition Letter to Senate

Bill Analysis 

Official CBO Cost Score for HR 3221

CBO Letter to Sen. Judd Gregg with Alternative Scoring