HOUSE PANEL APPROVES STOPGAP FISCAL 1986 SPENDING BILL - PANEL EXPLORES ALLOWING SALLIE MAE INTO COLLEGE CONSTRUCTION ARENA

Sep 21, 2026

Reports on two separate U.S. House panel discussions from September 13, 1985. One covers a 45-day continuing resolution approved by voice vote to fund the Education Department and other agencies at current levels until early fiscal 1986. The other details testimony by Sallie Mae President Edward Fox proposing a federally sponsored insurance corporation to back private-capital loans for college construction and renovation, including funding estimates, loan guarantees, and reactions from lawmakers and university officials.

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HOUSE PANEL APPROVES STOPGAP FISCAL 1986 SPENDING BILL

Temporary spending bill and timing

Committee approval and next steps

PANEL EXPLORES ALLOWING SALLIE MAE INTO COLLEGE CONSTRUCTION ARENA

Proposed insurance corporation model

Funding assumptions and guarantee mechanism

Testimony, concerns, and congressional interest

Friday,September 13,1985 # HOUSE PANEL APPROVES STOPGAP FISCAL 1986 SPENDING BILL The House Appropriations Committee yesterday approved a temporary spending billthat would fund the Education Department at its current level through thebeginning of fiscal 1986,which begins Oct.1. The 45-day stopgap spending bill,called a continuing resolution,was approvedby voice vote.The measure,which had not been given a number yesterday,alsowould fund other government agencies into the start of the fiscal year.It isseheduled to go to the full House next week and then to the Senate for finalapproval. Markup Scheduled The committee approved the temporary measure,whichwould fund ED at $19.1 billion in fiscal 1986,although it has tentativelyscheduled a markup for late September on permanent 1986 appropriations. The permanent bill,if approved before the stopgap measure expires Nov.14,would supersede the levels contained in the continuing resolution. The committee has not released information on the permanent bill since it wasmarked up by the Labor,Health and Human Services and Education ADpropriationsSubcommittee in executive session Sept.5(HED,Sept.9)。--Kristina Brenneman # PANEL EXPLORES ALLOWING SALLIE MAE INTO COLLEGE CONSTRUCTION ARENA The Student Loan Marketing Association(Sallie Mae),already the nation'slargest secondary market for student loan capital,may become involved incollege construction financing under an idea floated before a House subcommit-tee Wednesday. In testimony offered by Sallie Mae President Edward Fox,a new federally spon-sored insurance corporation could be created to back loans utilizing privatefunds for college construction or renovation.Such a corporation,Fox said,would go a long way toward upgrading the deteriorating buildings found on manycampuses. Unlike Sallie Mae,which functions as a secondary market,Fox said,the insur-ance corporation would act as a business,"based on sound underwriting stan-dards and practices to insure the integrity of the private sector loans and thefederal government's seed capital investment." Fox added that Sallie Mae would like to be involved as an investor and would beinterested in managing the new corporation.(more) HEA— # PANEL EXPLORES ALLOWING SALLIE MAE INTO COLLEGE CONSTRUCTION(Cont.) Fox made his suggestion as the House Postsecondary Education Subcommittee stud-ied Title VII college construction and housing programs,part of its reauthor-ization process for the Higher Education Act of 1965. Sallie Mae's interest in the problems facing college construction came as theresult of discussions with a number of college presidents,Fox said. With a federal commitment of about $25 million per year and a private fund of$5 million per year,Fox said,enough capital could be raised to make the corporation self-supporting in six years,andenough insurance could be provided in the first Reauthorizationyear to back loans worth millions of dollars.’85Indeed,Michigan State University President JohnDiBiaggio testified that Sallie Mae's idea has merit since the federal govern-ment appears unwilling to increase its commitment of direct academic facilitiesgrants.Not funded in fiscal 1983,Congress appropriated $28 million to theprogram in 1984.While appreciated,DiBiaggio said it was"a drop in thebucket." DiBiaggio restated what many have said in the past:college buildings are crum-bling at an alarming rate。The total physical plant in higher education,witha replacement value of $200 billion,currently needs replacement or renewalfunds of $40 billion,he said. "Such a program [by Sallie Mae],we believe,would be a natural extension ofits present activities,”DiBiaggio concluded. Under the Sallie Mae plan,a college in need of funds could arrange potentialfinancing through a bank on either a taxable or tax-exempt basis,and wouldthen apply to have that loan guaranteed by the new corporation. Assuming the college was financially sound,Fox said,the insurance corporationwoul

FAQs

What spending bill did the House Appropriations Committee approve for fiscal 1986?

It approved a 45-day continuing resolution to fund the Education Department at its current level through the beginning of fiscal 1986 and to fund other agencies into the start of the fiscal year.

What is the proposed Sallie Mae plan for college construction financing?

Sallie Mae President Edward Fox described creating a federally sponsored insurance corporation that would back loans using private funds for college construction or renovation, with loan guarantees conditioned on financial soundness.

Why did university and congressional participants show interest in the graduate education and facilities proposals?

They linked graduate-school access and the deteriorating state of college buildings to broader national competitiveness, noting concerns about funding levels and emphasizing the need for additional action and further study.

Sep 21, 2026

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