The House of Representatives approved legislation Thursday to overhaul the federal government's student lending policies. This is a major legislative victory for President Obama, who considers signing the Student Aid and Fiscal Responsibility Act of 2009 into law a top domestic priority, Inside Higher Ed reports.
If approved by the Senate, the student aid bill will cease all lending from the bank-based Family Federal Education Loan Program and reroute the savings from this shift to a wide range of programs, including some outside of higher education.
"This legislation provides students and families with the single largest investment in federal student aid ever and makes landmark investments to improve education for students of all ages—and all without costing taxpayers a dime," Rep. George Miller, chairman of the House Education and Labor Committee, said in a news release. "Today the House made a clear choice to stop funneling vital taxpayer dollars through boardrooms and start sending them directly to dorm rooms. This vote was a historic triumph for America's students, families, and taxpayers—and will ensure that their interests never again take a back seat to lenders and big banks."
Among other things, the legislation would:
Many lenders oppose the proposal to end lending through the FFEL program, saying the change will eliminate jobs and competition. Though Democrats claim the bill had bipartisan support, it garnered just five Republican votes in the 253-to-171 tally in the House.