PUBLIC POLICY
Health Care Reform Bill Affects Higher Education
BY CAROL HOLLADAY
The health care debate that began during the 2008 presidential campaign ended in March 2010 with the passage of the most sweeping health care reform in our nation’s history. As the final deliberations unfolded, the higher educa- tion community was anxious to learn how the new legislation would affect colleges and universities. In February 2009, President Barack Obama proposed two goals for his administration: pass health care reform and create one student loan system that would eliminate subsidies on loans to private lenders. As the health care
debate heated up in fall 2009, the U.S. House of Representatives passed the Student Aid Fiscal Responsibility Act (SAFRA).
The act met the administration’s goals by creating one direct
loan program, eliminating the Federal Family Education Loan
Program (FFELP) and federal subsidies and using the savings
to increase Pell Grant funding to help eliminate a growing
shortfall in that program. This bill also created a sweeping new
grant program, the American Graduation Initiative, which
included initiatives for higher education, focusing on community colleges. The Senate did not act on the bill, and it became
clear that an expedited process would be needed to pass health
care reform and changes to the student loan programs.
The health care reform bill passed in the House of
Representatives in late November 2009. The Senate struggled but finally passed their version of the bill just before
Christmas. However, after the surprise Massachusetts state
election of Republican Scott Brown to fill the vacancy created
by the death of Senator Ted Kennedy, the Democrats lost their
supermajority in the Senate, forcing passage of health care
reform through the reconciliation process. Throughout this
debate on health care reform, the higher education community watched closely and voiced concerns. The Senate version
of the health care reform bill was more favorable to higher
education with its exemption for student aid insurance. The
House version of the bill did not include a similar provision
and lumped student insurance plans into individual health
insurance options that are more costly for students. For the
MORE STUDENT AFFAIRS LAW AND POLICY
ASPA offers a variety of programs and publications that
explore in-depth the most pressing topics in higher education
law and policy. Join your colleagues at the NASPA Student Affairs
Law and Policy Conference, December 9–11, 2010, in Austin,
Texas. This must-attend event will provide current legal informa-
tion per case law; recommended practices from various higher
education institutions; and the opportunity to discuss, dissect,
and bridge theory to practice. For more information, visit
www.naspa.org/programs/lawcert/
Add to your reading list the new Law, Policy, and Ethics column
in NetResults magazine ( www.naspa.org/pubs/mags/nr). The col-
umn is edited by Gary Pavela, a fellow of the National Association
of College and University Attorneys. The articles are designed to
encourage discussion and analysis on a variety of higher educa-
tion legal issues.
higher education community, one of the only advantages to
both the Senate and the House health care reform plans was
the allowance for parents to extend health insurance coverage
to their children to the age of 26.
When Congress reconvened in late January, many thought
health care reform was on life support. It was unclear what
would happen with SAFRA, FFELP, and the Pell increase. A
new push by the House of Representatives moved health care
reform forward. Through many procedural maneuvers, the
House passed the Senate version of the health care bill, and in
a separate vote passed a reconciliation measure that contained
student aid language. The Senate version included the exemption of the student aid insurance package for institutions.
Following original projections of $81 billion in savings as a
result of the elimination of loan subsidies to private lenders,
the Congressional Budget Office and the Senate lowered the
savings projection to $61 billion, with $10 billion committed
to helping pay for the health care reform package. The scaled
down version of the higher education package eliminated most
of the administration’s priorities, but saved a smaller $750 million expansion of the existing College Access Challenge Grant
Program. The bill eliminates FFELP and creates a full direct
lending program; includes $2 billion to fund a Department
of Labor career training program that was created in last year’s
stimulus bill; and directs $2.55 billion over 10 years to historically black colleges and universities, Hispanic-serving institutions, and tribal colleges. The bill also expands income-based
repayment options so new student borrowers who assume
loans after July 1, 2014, can cap student loan repayments at
10 percent of discretionary income and, if they keep up with
payments over time, will have the balance forgiven after 20
years. The bill increases the Pell Grant maximum award in
tandem with increases in the Consumer Price Index from
2013 through 2017, which is estimated to raise the award
amounts from $5,550 to $5,975. The bill does not reform the
Perkins Loan Program as previously expected.
As more details emerge, check the NASPA Public Policy
website at www.naspa.org/divctr/pp for information from the
Consortium on Government Relations for Student Affairs. LE
Carol Holladay is a senior associate at Hurt, Norton & Associates and
works with the Consortium on Government Relations for Student Affairs,
of which NASPA is a member.
