PICKET: Could Obamacare passed student loan provisions be struck down too?

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Perhaps one major part of Obama’s health care law that could fall on Thursday, if the Supreme Court rules the health care legislation’s mandate is unconstitutional will be student loan reform provisions known as the Student Aid and Fiscal Responsibility Act (SAFRA) that were passed in the Senate via the Affordable Care Act through a further Senate parliamentary procedure known as budget reconciliation.

The legislation consists of two bills: the Senate-passed Patient Protection and Affordable Care Act (H.R. 3590), subsequently also passed by the House; and the Reconciliation Act of 2010 (H.R. 4872), which altered Senate bill. H.R. 4872 and has modifications in Federal student loans. 

A simple majority was needed for the reconciliation process for passage of the two bills. By passing Obamacare and SAFRA this way, Senate Democrats managed to avoid attempting to overcome a GOP filibuster of the massive health care bill.  

SAFRA made the federal government the only lender of student loans and cut out private lenders from the process. SAFRA halted loans from the bank based Family Federal Education Loan (FFEL) Program and sent the final savings into Pell Grants, community college aid, early childhood education and other programs. In essence, Obamacare was not just the federal government takeover of health care, but it quietly became the federal government takeover of student loans as well.

The Wall Street Journal editorial page wrote in March of 2010:

Everyone knows Democrats are planning to use the budget reconciliation process to get ObamaCare through the Senate. Less well known is that Democrats are plotting add-ons to that bill to get other liberal priorities enacted—programs that could never attract 60 votes.

One of these controversial measures rewrites the Higher Education Act to ban private companies from offering federally guaranteed student loans as of this July. Congress has already passed laws in recent years discouraging private lenders from making loans without a federal guarantee.

But most college financial-aid departments still want private companies to originate and service the guaranteed loans. That’s because the alternative—a public option run by the Department of Education—has been distinguished by its Soviet-style customer service.


The Democratic plan is to make this public option the only option mere days before colleges send out their financial aid packages to incoming students. The House and Senate budget committees issued instructions last year to look for savings in the student-lending program, so the Democrats have prepared in advance their excuse to jam these changes through the reconciliation process.

This aspect of the health care bill is important because, Congress has until Sunday to hammer out legislation that would include a measure for a one-year extension for lower federal student loans. The Wall Street Journal reports, “If Congress failed to act, the rate would double on Sunday to 6.8% for about 7.4 million students expected to take out new Stafford Loans, the most common kind of student borrowing, over the next year.”

According to SCOTUS both public laws (Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act) are part of the lawsuit the Supreme Court is releasing an opinion on tomorrow (see below). Apparently, it looks like higher education provisions will be kept if the mandate is severed or invalidated with the rest if the law[s] are struck down: (bolding is mine)

11-398 DEPARTMENT OF HEALTH AND HUMAN SERVICES V. FLORIDA DECISION BELOW: 648 F.3d 1235

QUESTION PRESENTED: Beginning in 2014, the minimum coverage provision of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029, will require non-exempted individuals to maintain a minimum level of health insurance or pay a tax penalty. 26 U.S.C.A. 5000A. The question presented is:

1. Whether Congress had the power under Article I of the Constitution to enact the minimum coverage provision. Petitioners also suggest that the Court direct the parties to address the following question:

2. Whether the suit brought by respondents to challenge the minimum coverage provision of the Patient Protection and Affordable Care Act is barred by the Anti-Injunction Act, 26 U.S.C. 7421(a).

The new federal direct lending infrastructure is already in place within colleges and universities. Secretary of Education Arne Duncan lobbied administrators from higher education establishments to set up the lending programs even before SAFRA was passed in the Senate in 2010. Will SAFRA fall on Thursday?…wait and see. 

 

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About the Author
Kerry Picket

Kerry Picket

Kerry Picket, a former Opinion Blogger/Editor of The Watercooler, was associate producer for the Media Research Center, a content producer for Robin Quivers of "The Howard Stern Show" on Sirius satellite radio and a production assistant and copy writer at MTV.

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