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Plan To Boost Pell Grant Aid Is Derailed

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WASHINGTON--Plans to eliminate a long-standing funding shortfall in the Pell Grant program appear to have been derailed by the House.

The House's effort to cope with a larger problem--the federal budget deficit--has complicated a plan to use an unexpected surplus in the Guaranteed Student Loan program to make up the Pell Grant shortfall.

As part of a bill that would appropriate an additional $12 billion for federal programs in the current fiscal year, the House Appropriations Committee had proposed transferring $287 million from the G.S.L. program to cover the deficit in the Pell Grant account.

For the past several years, higher-than-expected costs have forced the Education Department to juggle its books in order to provide grants to all students eligible for them. While the department has been able to cover the shortfall by allocating money from future appropriations, this "borrowing'' has left a sizable deficit that must be carried over from year to year.

To eliminate the shortfall, the Reagan Administration had proposed dipping into the unexpected G.S.L. surplus created by the sharp decline in interest rates over the past year.

Although endorsed by the Appropriations panel, the plan became caught in a political crossfire when the full House voted last month to lop nearly $2 billion from the committee's spending recommendations.

Among other things, the cuts reduced by $10 million a proposed $50-million increase in funding for the Labor Department's summer-jobs program for youths, and pared $210,000 from a $1-million addition to the vocational-education budget.

The across-the-board cuts, which proponents said were needed to stay within the limits set out in the Gramm-Rudman-Hollings budget law, were intended to reduce new appropriations. But House staff experts say the Pell Grant transfer was also affected.

"We don't see anything in the language that would support any other interpretation,'' one Appropriations Committee staff member said.

The Pell Grant program would still carry a $60-million deficit into the 1987-88 academic year if the House version of the bill prevails. Education Department officials have said they will make reductions in some grant awards if the Congress does not provide money to close the deficit.

The Senate Appropriations Committee, however, is expected to include a Pell Grant relief plan in its version of the supplemental measure. Because of the Senate's stricter budget rules, that bill is not expected to exceed Gramm-Rudman targets, thus making it easier to push it through intact.

A House-Senate conference committee could then solve the problem by agreeing to adopt the Senate's Pell Grant language.

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