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 President Signs Education Reconciliation Bill 

3/30/2010

On March 30, 2010, at a ceremony at Northern Virginia Community College, President Obama signed H.R. 4872, the Health Care and Education Affordability Reconciliation Act, into law. This legislation consists of two titles:  Title I, which makes changes to certain provisions of the health care legislation earlier signed into law, and Title II, which consists mainly of the student loan reform bill, or SAFRA.

  • The text of the legislation is available here.
  • Click here to view video of Dr. Jill Biden discussing how the Health Care and Education Affordability Reconciliation Act makes college more affordable.

The highlights of the final legislation are as follows:

  • New Training Grants to Community Colleges$2 billion is provided for the Community College and Career Training Grant Program, a new Trade Adjustment Assistance (TAA) program that was created in last year’s American Recovery and Reinvestment Act but never funded.  The reconciliation bill provides $500 million per year for fiscal years 2011 – 14 for this program, to fund training and education programs at community colleges and other institutions that serve the needs of TAA-eligible workers.  These grants will be awarded competitively, but one or more institutions in each state will receive at least .5% of the grant funds, or $2.5 million per state.  The program should fund a wide range of training initiatives.  The TAA funding is an outgrowth of the American Graduation Initiative (AGI), whose supporters were able to identify significant funding for community colleges when, primarily for fiscal reasons, the AGI was deleted from the final bill.
  • Pell GrantsThe legislation ensures a continued maximum grant of $5,550, as is scheduled to take effect this July 1.  For award years 2013-14 through 2017-18, the bill provides annual mandatory increases in the maximum award that are equal to the Consumer Price Index.  The legislation will also provide $13.5 billion to help address a large shortfall in the program that has developed due to booming enrollment increases that have resulted in more students qualifying for grants, and many qualifying for larger grants.  These resources will help Congress avoid making substantial cuts in the Pell Grant maximum in future years.
  • Loan ProgramsThe bill terminates the Federal Family Education Loan program, with all institutions moving to the Direct Loan program by July 1 of this year.  This move is expected to save the federal government an estimated $61 billion over the next 10 years, with the funds being used to provide additional resources for the Pell Grant program and other priorities.   The legislation requires the Department of Education to provide technical assistance to institutions making the switch to Direct Lending, including $50 million for this purpose.  The legislation also amends the IncomeBased Repayment program to cap student loan payments for new borrowers after July 1, 2014 at 10% of adjusted income, from the current 15% percent, and to forgive remaining balances after 20 years of repayment, versus the current 25 years.
  • Institutional Aid$2.55 billion of additional funding is provided for Minority-Serving Institutions over the next 10 years, continuing funding originally provided for in the College Cost Reduction and Affordability Act (CCRAA).  This includes $100 million to Hispanic Serving Institutions, $85 million to Historically Black Colleges and Universities, $15 million to Predominantly Black Institutions, $30 million to Tribal Colleges and Universities, $15 million to Alaska and Hawaiian Native Institutions, $5 million to Asian American and Pacific Islander Institutions, and $5 million to Native American nontribal serving institutions each year.
  • College Access Challenge GrantsThe legislation also provides $750 million for continuation of the College Access Challenge Grants, also originally authorized in CCRAA, at $150 million per year through FY14.

For more information, please contact David Baime, dbaime@aacc.nche.edu, at 202-728-0200, ext. 224, or Jim Hermes, jhermes@aacc.nche.edu, extension 216.

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