The SAFRA Act: Education Reconciliation in the 111th Congress

Cassandria Dortch, Coordinator
Analyst in Education Policy

David P. Smole
Specialist in Education Policy

Shannon M. Mahan
Specialist in Education Policy

The FY2010 budget resolution (S.Con.Res. 13) includes reconciliation instructions that specifically direct the House Committee on Education and Labor to report a bill that invests in education while reducing the deficit by $1 billion over the FY2009-FY2014 period. The budget resolution also directed four other committees—two in the House and two in the Senate—to each report changes in laws within their jurisdictions to reduce the deficit by $1 billion for the period of FY2009 through FY2014. 

In response to budget reconciliation instructions on July 27, 2009, the House Committee on Education and Labor submitted H.Rept. 111-232 to accompany H.R. 3221 to the House Budget Committee for incorporation into the budget reconciliation bill. The House is preparing to vote on H.R. 3590, the health care reform measure as passed by the Senate, and on an accompanying reconciliation bill, the Amendment in the Nature of a Substitute to H.R. 4872, as reported (subsequently referred to as the Amendment to H.R. 4872). The reconciliation bill would change several controversial elements in H.R. 3590 and otherwise amend the underlying legislation so that its budgetary impact meets the reconciliation instructions in last year's budget resolution. If the House approves H.R. 3590, it will be sent to the President to be signed into law. The reconciliation measure, the Amendment to H.R. 4872, if approved by the House, would then be taken up by the Senate. 

Several of the education provisions in H.R. 3221 were not preserved in the Amendment to H.R. 4872. Title II, Part A of the Amendment to H.R. 4872 would terminate authority under the Higher Education Act (HEA) of 1965, as amended, to make loans under the Federal Family Education Loan (FFEL) program after June 2010. The Congressional Budget Office (CBO) estimates that this would reduce mandatory spending by $28.6 billion over the FY2010-FY2014 period, and by $61.0 billion over the FY2010-FY2019 period. These savings would be large enough to achieve the $1 billion reduction in spending specified in S.Con.Res. 13, while offsetting increases in mandatory spending that would result from the expansion of other HEA programs. Overall, CBO estimates that Title II, Part A of the Amendment to H.R. 4872 would reduce mandatory spending by $5.1 billion over the FY2010-FY2014 period and by $19.1 billion over the FY2010-FY2019 period. 

In addition to terminating the authority to make loans under the FFEL program, Title II, Part A of the Amendment to H.R. 4872 would fund expansions of existing HEA programs and benefits, including the Federal Pell Grant program, the William D. Ford Federal Direct Loan (DL) program, programs serving Historically Black Colleges and Universities (HBCUs) and other Minority-Serving Institutions, and the College Access Challenge Grant program. It would also amend the income-based repayment (IBR) plan. 

Title I of the Amendment to H.R. 4872 contains provisions regarding health coverage, Medicare, Medicaid, and various tax revenues. Title I would also amend and fund the Community College and Career Training Grant Program. 

This report reviews and briefly describes the proposals contained in the Amendment to H.R. 4872, particularly those which amend programs authorized under HEA. It will be updated as warranted to track legislative developments.


Date of Report: March 19, 2010
Number of Pages: 20
Order Number: R41127
Price: $19.95

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