The SAFRA Act: Education Programs in theFY2010 Budget Reconciliation

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) included two reconciliation instructions directing the House Committee on Education and Labor to report changes in laws within their jurisdictions to reduce the deficit by $1 billion each for the period of fiscal year (FY) 2009 through FY2014. The reconciliation instructions specifically noted that $1 billion of the reduction from the House Committee on Education and Labor should be related to education. 

On October 7, 2009, in response to the FY2010 budget reconciliation instructions, the House Committee on Education and Labor submitted H.R. 3221 to the House Budget Committee as education-related reconciliation instructions. Certain provisions of H.R. 3221 were incorporated into H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (HCERA). On March 30, 2010, President Obama signed H.R. 4872 into law (P.L. 111-152). 

The SAFRA Act, Title II, Part A of the law, terminates the 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 will reduce mandatory spending by $29 billion over the FY2010-FY2014 period, and by $61 billion over the FY2010-FY2019 period. These savings are sufficient to achieve the $1 billion reduction in spending specified in S.Con.Res. 13, while offsetting an increase in mandatory spending as a result of expanding other HEA programs. 

A significant portion of the savings estimated to result from enactment of the SAFRA Act offsets additional mandatory appropriations for the Federal Pell Grant program. The SAFRA Act also makes the following changes to several HEA programs: the William D. Ford Federal Direct Loan (DL) program is amended to accommodate the termination of the FFEL program; and existing HEA programs for Historically Black Colleges and Universities (HBCUs) and other Minority- Serving Institutions and the College Access Challenge Grant (CACG) program are extended with mandatory appropriations. The law also amends the income-based repayment (IBR) plan. Overall, CBO estimates that the SAFRA Act reduces mandatory spending by $5 billion over the FY2010- FY2014 period, and by $19 billion over the FY2010-FY2019 period. 

Title I of the HCERA contains provisions regarding health coverage, Medicare, Medicaid, and various tax revenues. Title I, Part F amends and funds the Department of Labor's Community College and Career Training Grant Program (CCCT). 

This report begins with a brief legislative history of the education-related provisions in P.L. 111- 152. It then identifies and describes selected amendments made to the HEA and other laws by P.L. 111-152.


Date of Report: April 14, 2010
Number of Pages: 22
Order Number: R41127
Price: $29.95

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