The intensifying political jockeying between Senate Republicans and Democrats over the judicial review process is expected to further delay reauthorization of the Higher Education Act of 1965. The reauthorization process has been brewing for years, but it has continually been put on the back burner by one event or another, although it had been widely anticipated to be passed soon after the last presidential election (BW, 3/15/04).
Now though, some student loan asset-backed professionals think the looming regulatory issue over this $40 billion plus part of the bond market will remain unsolved. That's because of the rhetoric in Washington over the judicial review process. Some Democrats, led by minority leader Sen. Harry Reid of Nevada, are attempting to block the review process to keep conservative justices off the bench, while Republicans have countered by threatening to enact a partial ban on judicial filibusters.
Of course, this issue is separate from that of the student loan market, but it could delay the reauthorization even further. "Now it looks like we're back to being unlikely this will get done this year. Because of this whole fight, I would reserve my predictions. It's looking more and more like it will eat up a lot of time" and further delay reauthorization, said David Hartung, director and head of the student loan group at Fitch Ratings.