CQ Politics

 Now that they’ve sent President Bush a bill to shore up the imperiled student loan system, lawmakers are ready to return their attention to a long-delayed overhaul of the entire Higher Education Act.

Congress hasn’t done a complete rewrite of that law, which governs federal aid to colleges and the students who attend them, in a decade. But it’s getting close this year.

Both the House and the Senate have passed Higher Education Act bills, but negotiations on a final version have dragged on inconclusively for months.

To buy more time for a deal, the House is expected to clear a one-month extension of the existing law late Monday. It is the fifth extension to move this year alone.

Both bills would increase the amount of information schools and lenders must provide students — including up-front disclosure of loan rates and terms, and data on total school costs — and would bar lenders from giving schools financial aid funds or any other perks to get on a “preferred lender” list.

Both measures would create a “higher education price index” that would allow parents and students to compare tuition increases over time. Schools that post sharp tuition hikes would be placed on “watch lists.”

But negotiations have stalled over a section of the House bill that would penalize states financially if they cut back their commitment to higher education.

The nation’s governors vehemently oppose that provision, which was not in the Senate’s higher education bill. They note that states, unlike the federal government, must balance their budgets every year. If governors and state legislators are not allowed to pare back funding for higher education in lean years, when they are cutting other programs, then they will not boost education spending in years when the fiscal picture is brighter, the state officials say. The end result will hurt colleges, not help them, the states argue.