H.R. 3221 would amend the Higher Education Act of 1965, which authorizes most federal postsecondary education programs. It would prohibit new federally guaranteed loans from being made under the Federal Family Education Loan (FFEL) Program and would increase direct spending for the Federal Pell Grant Program and other programs. The elimination of guaranteed student loans would lead to a comparable increase in direct lending by the government. The estimated subsidy cost shown in the budget is lower for the direct student loan program than for the FFEL program. Thus, enacting the bill would yield net budgetary savings for shifting new lending from the guaranteed loan program to the direct loan program. On balance, Congressional Budget Office (CBO) estimates that enacting H.R. 3221 would reduce direct spending by $13.3 billion over the 2009-2013 period and $7.8 billion over the 2009-2019 period. Assuming appropriation of the necessary amounts, implementing the bill would increase discretionary spending by at least $13.5 billion over the 2009-2019 period. (That estimate reflects the bulk of the likely discretionary costs under H.R. 3221; but CBO has not completed a comprehensive estimate of all effects that would be subject to appropriation action.) Enacting H.R. 3221 would not affect revenues. H.R. 3221 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). (Contains 5 tables.)