ABC News’ Mary Bruce Reports: House Democrats plan to attach reform of the federal student loan system to the health care overhaul legislation, Speaker of the House Nancy Pelosi said today. Folding student loan legislation into the reconciliation bill for health care reform “fixes” could allow the Obama administration to pass two of their top domestic priorities with a simple Senate majority vote.
“Joining these two bills presents a remarkable opportunity for our country,” Chairman of the House Education Committee Rep. George Miller, D-Calif., said yesterday.
Republicans opposing the deal have questioned this use of the reconciliation process.
“The government takeover of health care is about to get weighed down by a government takeover of student loans,” Senior Republican on the House Education Committee Rep. John Kline said in a written statement.
“Surely congressional Democrats would not use budget reconciliation – a complex budget maneuver designed to rein in the cost of government – to increase the size, scope, and cost of government,” he said.
On Tuesday, six Democrats sent a letter to Senate Majority Leader Harry Reid stating their support for student loan reform but arguing that “we must proceed toward this objective in a thoughtful manner that considers potential alternative legislative proposals.”
Pelosi noted that it “has always been part of the plan” to include student loan reform in the reconciliation process because of the rules outlined in the 2009 budget resolution. Furthermore, Politico reports that Democrats may have to include student loan reform in the reconciliation bill to meet the cost-saving requirements of reconciliation.
Without including it in the reconciliation package it would be unlikely for the student loan bill to pass the Senate.
The Student Aid and Fiscal Responsibility Act would cut out the middle man from federal student loan programs and give students the chance to borrow directly from the federal government instead of from banks. The bill, which passed the House in September, would also greatly expand the Pell grant program for low-income students.
When the bill passed the House it had an estimated savings of $87 billion over ten years. Since then that number has dropped to $67 billion as colleges have joined the “Direct Lending” program and reduced the amount of revenue that would be available for new spending.
Not surprisingly, banks have lobbied aggressively against the bill.