ACTION: AASCU members are encouraged to call their member of Congress to ask them to vote against the House Budget Reconciliation Bill. Please call your member of Congress before Thursday, November 10, the scheduled time for the House floor vote on final passage of this bill.

AASCU is very concerned about the impending federal budget reconciliation process in the House and Senate. We are particularly concerned that the House budget reconciliation unfairly targets up to $15 billion in cuts from student loans over six years to meet arbitrary budget targets in pending reconciliation bills. These cuts will force students to work more or borrow more privately to reach their higher education goals--or forego them completely.

In recent months, the education committees in the House and Senate have been using the bills they report reauthorizing the Higher Education Act (HEA) to achieve federal deficit reduction targets agreed to in the FY2006 Budget Resolution passed by Congress in April. At that time, the deficit reduction goal was $35 billion over 6 yrs. Over this period, total federal spending is projected to be $13.8 trillion, and the deficit is projected at slightly over $1 trillion.

The House leadership recently decided to increase the total amount to be saved from the federal budget in a reconciliation bill from $35 billion to over $50 billion, which led the leadership to increase the target savings over five years to be achieved by the Education and Workforce Committee from the mandatory student loan programs from $11 billion to $14 billion. The overall federal deficit reduction target is only .3% of federal spending, and only about 2.5% of the federal deficit. The proportion to be achieved by the federal loan programs, however, is almost one-third of the federal total deficit reduction of $50 billion. What Congress requires students to pay to lenders can exceed the interest that Congress has guaranteed lenders to ensure their participation in the Federal Family Education Loan Program (FFELP). The Congressional Budget Office (CBO) has estimated that capturing these excess student payments would save the federal government $12 billion in FY2006-2010, and $29 billion in FY2006-2015.


We believe that the share to be taken from the federal loan programs is grossly unfair and excessive. The budget must not be balanced on the backs of students. Similar budget cutting legislation is underway in the Senate but some of the funds cut from the loan programs are being plugged into new grant programs to assist needy students.

AASCU's response to the Senate HEA bill.

AASCU and the other associations in the Student Aid Alliance have taken the position that excess interest received by lenders that is captured in the reauthorization of the HEA should be used to make student debt more manageable, not reduce the federal deficit or fund other federal expenses.

A more detailed description of AASCU’s concerns regarding the House bill, H.R. 609, was contained in a letter to the House Committee and Sub-committee Chairmen when the bill was first marked up.

Subsequently, additional cuts have been made to achieve the new reconciliation targets proposed by the House leadership.

Please act today to stop more education cuts. Please call your member of Congress by Thursday and ask him or her to vote against the House Budget Reconciliation Bill.