Under the provisions of H.R.322, all new federal student loans will be originated directly by the federal government rather than by private lenders issuing federally-guaranteed loans. The legislation was designed, in part, to hold down the interest rate on federal education loans, and to make it easier for families to apply for college financial aid. The non-partisan Congressional Budget Office had estimated that shifting new educational lending from a guaranteed third party loan program to a direct loan program would generate significant budgetary savings. This was a vote on the resolution or “rule” setting the terms for debating the bill.

H.R. 3221, among other things, also significantly increased federal scholarship and grant program and funding for historically black colleges and community colleges. In addition, it included additional funding for early childhood education, and provisions to help veterans attend college under the GI Bill and to give loan forgiveness to members of the military who are called up to duty in the middle of an academic year.

Rep. Polis (D-CO), was leading the support for the rule. He said that there is a serious problem of students either not being able to afford college, or being able to afford it only with “excessive student loan debt that burdens their families.” Polis claimed that the bill made “the single largest investment in higher education in history without costing taxpayers any more.”

Rep. Foxx (R-NC) was leading the opposition to the rule. She first noted that the title of the bill includes the words “fiscal responsibility”. She then said: “(H)owever, this bill and, of course, the rule, which we are debating today, aren't fiscally responsible and this is not the way we should be going.” Foxx quoted the supporters of the bill and the rule as saying: “(I)t's going to give more freedom to people . . . It's going to close the achievement gap.” She then said: “(W)ould that the government had that kind of power. Would that money alone (could) do that kind of thing. That's not what this bill is going to do . . . .”

Foxx argued that, by moving all student loans to a government-run system, the bill will increase “the federal government takeover of . . . higher education . . . It is an insidious intrusion into education at all levels by the federal government . . . .” Rep. Dreier (R-CA) also opposed the bill, claiming that the federal government could not do as good a job in providing educational loans as the private sector. Dreier argued that having competition in the private sector would be the most effective way to keep interest rates on down on education loans.

Rep. Kline (R-MN) opposed the rule because, he said, “(R)epublicans offered more than a dozen amendments to this deeply flawed legislation . . . Six of those amendments were made in order (under the rule), less than half. By comparison, Democrats offered a total of 32 amendments: 18 were made in order and another five were incorporated into the manager's amendment. That means in total 72 percent of the amendments offered by Democrats will receive a vote today.”

The resolution ending government-guaranteed education loans by third parties and increasing the level of direct government education lending to students passed by a vote of 241-179. All two hundred and forty-one “aye” votes were cast by Democrats. Six other Democrats and one hundred and seventy-three Republicans voted “nay”. As a result, the House was able to begin formal debate of the legislation making education loans a direct federal program rather than one administered by third parties.