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Managing America: Education

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Week Ending June 26, 2009

H.R.1777 To make technical corrections to the Higher Education Act of 1965, and for other purposes.

The bill makes technical amendments to the Higher Education Act of 1965. The basic Act deals with federal programs that support higher education such as Pell grants government education loan programs.

Specific areas of the bill amended are --

an amendment to continue to consider foreign public or private nonprofit nursing schools as authorized to participate in the Federal Family Education Loan program;

Excludes Howard University from eligibility for capacity-building grants to predominantly Black Institutions. The university receives assistance under an 1867 law;

Increases authorized maximum amounts that can be received under the Pell Grant Program for FY 2013 and FY 2015;

The (student loan) default reduction program ius revised to allow guaranty agencies to assign rehabilitative loans to the Secretary of Education until October 2011. The assignments are authorized if the guarantors could not sell the loan to other lenders and the Secretary determines the market conditions unduly limit their ability to sell the loan. Adverse information regarding the loan is to be removed from the borrower’s credit history.

Lenders are specifically prohibited from offering inducements to those who might buy a rehabilitated loan.

The Secretary is authorized to enter into present and future commitments to buy rehabilitated loans that eligible buyers bought between October 2003 and June 2010 provided the purchases do not result in a net cost to the federal government. The federal purchase of such loans comes with the agreement that the money they receive when the federal government purchases the loan is used to originate new federal loans to students or to purchase other rehabilitated loans under the default reduction program.

The bill reduces to zero the amount of the ‘expected family contribution’ when determining a students eligibility for student aid. The amount will be zero for students who are eligible for Pell grants and whose parents or guardians was killed while on active duty in Iraq or Afghanistan after September 11, 2001.

A competitive Loan Auction Pilot Program soon to be implemented is delayed from July 1, 2009 to July 1, 2010. The program would hold biennial auctions in each State and would allow prequalified lenders to compete for exclusive right to make federal education PLUS loans at institutions of higher learning in the State. The bill also delays the implementation of the EZ FAFSA (Free Application for Federal Student Aid), a simplified format for use in applying for federal student aid, until the 2010-2011 school year.

The bill also makes technical amendments to provisions for developing institutions, international education, graduate and post-secondary improvement and education for the Deaf.

Sponsor:  Rep. George Miller (CA-7^th)

Vote: Passed House by voice vote March 30, 2009. Passed the Senate amended by unanimous consent June 23, 2009. On motion that the House suspend the rules and agree to the Senate amendment Agreed to by recorded vote (2/3 required): 411 - 0 (Roll no. 423).

Cost to the taxpayers:

Earmark Certification:  

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