While the passage of health care reform captured most of the attention Sunday night, the House of Representatives also passed measures affecting how college students receive loans.
The Health Care and Education Affordability Reconciliation Act passed with a vote of 220 to 211 and can expand the government’s direct lending program so all student loans would originate directly from the government.
The bill would eliminate the Federal Family Education Loan Program, meaning the federal government would no longer pay fees to banks or private lenders that originate loans. One lender, Sallie Mae, already estimates 2,500 jobs will be lost because of the changes.
The Congressional Budget Office estimates that the changes to student lending will save $61 billion over 10 years. According to a press release from the House Education and Labor Committee, the savings will go towards more student grants and educational programs.
GW has already applied and been approved to participate in the government’s Direct Loan Program if it becomes mandated, and the University had considered switching to the program even before the legislation passed the House.
The student loan reforms were first passed by the House last fall, but the Senate must now vote on this recent legislation before it is enacted.