Last Thursday, the Senate (by a 56-43 vote) and House (by a 220-207 vote) approved the Student Aid and Fiscal Responsibility Act (SAFRA), which was included in the Health Care and Education Reconciliation Act of 2010, clearing the reform legislation for the President’s signature today at Northern Virginia Community College in Alexandria, Virginia.
(Official White House Photo by Pete Souza
SAFRA ends the federally-guaranteed Federal Family Education Loan (FFEL) program and converts all federal student lending to the Direct Loan (DL) program. Beginning July 1, 2010, all new federal student loans will be originated through the DL program, which is a more reliable lender for students and more cost-effective for taxpayers. Elimination of the FFEL program and originating all new loans in the DL program will yield a net savings of $61 billion over 10 years that will be invested in aid to postsecondary education. NACAC members note the following investments:
- $36 billion for the Pell Grant program that will increase the maximum award to $5,550 in 2010 and to $5,975 by 2017. Starting in 2013, the award will be indexed at inflation and increase with costs-of-living. This investment includes $13.5 billion to fund the fiscal year 2011 shortfall due to increased Pell Grant demand;
- $750 million for the college access and completion support for students, part of which will increase funding for the College Access Challenge Grant program;
- $1.5 billion for Income-Based Repayment program that currently caps monthly payments at 15 percent of discretionary income. Starting in 2014, new borrowers can cap their payments at just 10 percent; and
- $2 billion for community colleges to develop and improve educational or career training programs.
NACAC has advocated in support of SAFRA since July 2009 when the House Education and Labor Committee introduced the bill. Throughout the past two weeks of reconciliation legislation activity, NACAC sent messages to the both Chambers urging supportive votes and even sent targeted messages to swing voters.
See how your Senators and Representative voted
in NACAC's Legislative Action Center.
Additional information about the legislation, including SAFRA's State-by-State Investments
, can be found on NACAC's SAFRA page
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