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April 30, 2009

Congress passes FY2010 budget resolution with changes to financial aid

With Congressional approval of the FY2010 budget, the House and Senate committees with authority over higher education and federal student aid have been given instructions to conduct a massive rewrite of federal student financial aid.

The budget resolution directs Congress to terminate federal subsidies of private lenders and put the savings into the Pell Grant program. Specific legislation must be passed to carry out this change.

According to an analysis by the U.S. Department of Education, the State of Kansas and Pell-eligible students would have access to more than $1 billion in Pell Grant funding between 2010 and 2019. The banking community has concerns about the impact of the proposal on the private student lending market.

KU has not been asked to participate in any lobbying or advocacy effort to date.