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Senate Bill Would Deny College Financial Aid to D and F Students

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Washington--College students entering their junior or senior years would have to have maintained a C average or better to qualify for federal financial aid under legislation approved by a Senate subcommittee.

In voting to reauthorize the Higher Education Act of 1965, the Senate Subcommittee on Education, Arts, and the Humanities last month made several other changes in existing law that would limit students' access to federal loans and grants, but would increase the amounts students who qualify could receive.

For example, the bill restricts Pell grants to students from families earning less than $30,000 a year, but raises the maximum award in 1987 from $2,100 to $2,400. The House has approved legislation that sets the maximum grant at $2,300.

Subcommittee staff aides said the new restrictions would ensure that only students who need federal grants and loans get them.

But according to Peter J. Gossens, director of governmental relations for the National Association of Independent Colleges and Universities, the C-average requirement would "simply lead to grade inflation," while the $30,000 family-income cap would penalize students from large families.

The Senate Labor and Human Resources Committee is expected to consider the bill next month.

House Bill

The Senate subcommittee bill differs significantly from a reauthorization measure the House approved earlier last month. (See Education Week, Dec. 11, 1985.)

The House bill did not include the requirement that students maintain a C average to qualify for federal aid, and it did not set a $30,000 family-income cutoff for Pell grant recipients. It did, however, require that all students submit to a financial needs-analysis test before becoming eligible for federal aid.

Also, while the House bill would provide $111.5 million in fiscal 1987 for numerous teacher-education programs, the Senate bill provides only limited funds for two such programs.

It authorizes $10.5 million in 1987 for the Carl D. Perkins Scholarship program, which is currently authorized at $20 million, and sets $5.25 million for the National Talented Teacher Fellowship program.

Authorized spending levels for both programs would increase by 5 percent a year until 1991.

"Essentially, we repealed Title V," a subcommittee aide said. Title V is the section of the act that funds teacher-education programs.

The House bill also includes numerous new programs for nontraditional students that the Senate bill does not fund.

$9.8 Billion

The Senate bill authorizes $9.8- billion for the many programs covered by the act, which is about $800- million less than the House voted to authorize and some $500 million more than current appropriations.

In general, the measure authorizes spending only for currently funded programs, and it limits their authorized spending levels to 5 percent above current appropriations.

One exception is a new $3.8-million program for projects that encourage students to do community service in return for financial aid. The House bill did not include this program.

"Gramm-Rudman made it clear that a huge, expensive bill could not pass the Senate," a subcommittee staff aide said, in explaining the lack of new programs in the Senate bill. She described the measure as "more realistic and responsible" than the House bill.

However, Mr. Gossens of naicu said the full committee could add programs when it considers the bill. "Any kinds of new programs were put off until the full committee markup," he said.

Major provisions of the subcommittee bill include:

Eligibility: Unlike the House bill, the Senate subcommittee bill does not establish a single needs-analysis test for all federal financial-aid programs.

Nor does it set a cutoff age for students wishing to declare independent financial status.

However, the Senate bill departs from existing law by requiring students who declare themselves independent to undergo a needs-analysis test for the two years prior to their aid application.

Current law requires applicants to demonstrate need for only the pri-or year. The subcommittee bill also allows child-care expenses as an income-offset in the needs-analysis test.

Current law does not allow child care to be considered in applications for Pell grants, and makes it optional for guaranteed loans.

Limits on loans, grants: The bill authorizes $4.3 billion for Pell grants in 1987, and $3.1 billion for guaranteed student loans.

It would allow students to borrow $3,000 a year for two years and $4,000 a year for three additional years, for a total of $18,000, unlike the House bill, which would allow students to borrow $5,000 a year in their junior and senior years but a cumulative total of $14,500.

Current law allows grants of up to $2,500 a year for five years.

Interest rates: The bill raises the interest rate on g.s.l.'s for new borrowers from 8 percent to 10 percent. It also raises the rate on National Direct Student Loans from 5 percent to 7 percent.

Campus-based programs: Unlike the House bill, which directs new money for campus-based aid programs to institutions with the neediest students, the Senate measure would target aid to the largest campuses with the greatest number of eligible aid recipients.

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