Education Reform After Healthcare Reform

Now that the House has voted to reform the federal student-loan program and end billions in subsidies to banks for acting as middlemen, the Senate is due to take it up next. The student-aid initiative was bundled in the House with health-care-reform adjustments as part of the reconciliation bill. The Senate now has to vote on the exact same package to make it law. Under reconciliation rules, the minority cannot prevent a vote by filibustering, so Democrats will need only 51 votes to pass the reconciliation package. Private lenders, who strongly oppose the change, will join Republicans opposed to health-care reform in efforts to delay or derail the Senate vote. While Senate staffers acknowledge that opponents may be successful in delaying the vote, they say they are confident that they have the votes to pass it.

The Congressional Budget Office has projected that by eliminating the bank subsidies and providing the loans directly, the government will save $61 billion over the next decade. Most of those savings will be used to provide more Pell grants to college students from low-income families and to increase funding to community colleges, while about $10 billion will be used for deficit reduction. It's also expected to bail out the Pell program this year, as college enrollments swell in response to the recession and unemployment. 

Meanwhile, both houses of Congress are holding hearings on President Obama's plan to update President Bush's signature education program, No Child Left Behind. A few weeks ago, U.S. Secretary of Education Arne Duncan released a blueprint that attempts to address persistent criticism that the original plan was too inflexible and failed to set high enough standards for academic achievement. However, Duncan says the reauthorized bill (technically known as the Elementary and Secondary Education Act) will maintain pressure on school districts to turn around failing schools and provide detailed data on how different groups of their students (poor, minority, or special needs) are faring. Congressional staffers said they hope the bill will be ready for a vote before the end of the year.

Another topic expected to get attention in coming months: better preschool programs. The original student-loan overhaul was designed to provide billions in new money to improve the quality and quantity of preschool programs, which would have fulfilled an Obama campaign promise. However, preschool funding disappeared in the final stripped-down version of the bill. Congressional Democrats say there's a good chance that they will circle back to the topic before the end of the year.

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