The Senate capped off a year of education funding reductions in December, narrowly passing a $12.7-billion cut to federal student loan programs – the largest cut in history, critics charge.

The measure – expected to shave $39.7 billion off the federal deficit over five years – is a production of discussions and debate from members of the House and Senate to settle differences between earlier House and Senate versions of a large budget reconciliation bill. Followed by the House’s approval, the Senate passed the bill Dec. 21 by a vote of 51-50, with Vice President Cheney breaking the tie.

Because the Senate added minor changes to the reconciliation bill before passing it, the measure now requires a second vote from the House before reaching the White House. Fleming said that the House is expected to complete the process by the end of March.

`The measure will cut student loans by slicing lender subsidies and fixing interest rates on parent loan repayments to 8.5 percent. A fraction of its savings – $3.75 billion over five years – will fund two grant programs designed for low-income students.

Luke Swarthout, a higher education adviser to the State Public Interest Research Groups, said that in comparison to the $12.7 billion being taken from loan programs, such a provision is insignificant.

“It is hard to see [the measure] as anything else other than as an outrageous raid on affordable education,” he said.

The State Public Interest Research Groups are “a network of independent, state-based, citizen-funded organizations that advocate for the public interest,” according to the organization’s web-site.

Republican lawmakers nevertheless indicated that the measure would help students over five years. The bill will raise loan limits for freshmen to $3,500, while increasing the limits to $4,500 for sophomores. Loan limits for graduate students were raised to $12,000 in the bill.

The bill also includes a change in federal student loans’ interest rates from a 2001 agreement. In the earlier version of the plan, the House supported the continuation of the current policy of keeping student loan interest rates variable and capped at 8.25 percent. The Senate version, however, fixed the interest rate at 6.8 percent starting this summer, a switch that the conference report now allows.

Various student groups raised concerns with Congress’ approach to interest rates.

“We have pushed for policy with variable interest rate with a cap at 6.8 percent,” Swarthout said. “We would prefer it lower.”

The government passed several other bills before the winter holidays that would further pressure the student aid programs. President Bush signed a health and education appropriation bill for fiscal year 2006 on Dec. 30 that will freeze most federal student aid programs, such as the Pell Grant award.

According to Scott Fleming, assistant to the university president for federal relations, Congress froze the maximum Pell Grant at $4,050, a level that has been held constant for four years.

“Having the maximum Pell Grant frozen is not good,” Fleming said.

Congress also passed a defense bill with an across-the-board discretionary spending cut of 1 percent, further reducing funding for student aid programs. Fleming said that the cut results in a loss of $31 million for programs like Perkins Loans.

“The conference report could be defeated,” Fleming said. “It creates another window of opportunity for Georgetown students and other students . to go back to their members of Congress and say, `Are you sure you really want to do this?'”