FY08 Student Loan Budget Update

According to a May 4, 2007 article briefing titled “Accordance on Budget Resolution Imminent” that appeared in the National Council of Higher Education Loan Programs Inc.'s Daily Briefing, To expand on yesterday's overview of FY 08 budget resolution developments, Congress Daily reported today that House and Senate conferees said they are working to iron out differences and should have negotiations wrapped up by late next week.

Regarding discussion on an a FY08 overall discretionary spending cap, the report indicated that House Budget Chairman John Spratt (D-SC) acknowledged that talks were moving in the direction of an overall figure of authorized expenditures that is $6 billion above the proposed Senate cap and $22 billion above the amount requested by the Administration.

“According to Congress Daily, the overall discretionary spending figure would cover full funding of the Administration's Pentagon request, which would allow the extra money to be allocated toward education, worker safety, veterans' benefits and other domestic programs”

Student Loans and the Budget

So, the big question that many of us are waiting to hear about is on student loans. According to the Daily Briefing:

“One of the open issues continues to be whether to include a reconciliation instruction to the committees with jurisdiction over the student loan programs. The House-passed version of the budget resolution instructs the Education and Labor Committee to come up with a net $75 million in savings. The catch here is that under a filibuster-proof budget reconciliation bill the Congress could pass deep cuts to the student loan programsand use most of the funds for other purposes so long as there is $75 in net savings. The Senate-passed resolution has no such provision. Senator Conrad, Chairman of the Senate Budget Committe, has expressed concern over using the budget reconciliation process to increase spending. According to Congress Daily, one of the solutions under discussion would be to increase the amount of deficit reduction savings the committees must approve (i.e. program cuts would be used to reduce the deficit rather than for additional spending). Congress Daily reports that there also is the possibility that reconciliation might be dropped altogether”

FY08 Budget and Student Loan Legislation

Apparently, the terms of the budget will directly affect the ability for student loan legislation that is currently being debated in the Senate to be passed. At this point the house version of the budget bill requires that the Education and Labor Committee come up with $75 million in net savings by cutting the much-needed Federal Family Education Loan Program in order to expand spending on other college-aid programs. However, eliminating the FFELP Loan Program most likely would cost students, families and taxpayers more money in the long-run.

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By Student Loan Girl

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