Subcommittee Delays Work on H.E.A. Proposals

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WASHINGTON--The House Subcommittee on Postsecondary Education last week decided to postpone for a week consideration of the two most ambitious proposals in a bill to reauthorize the Higher Education Act, after it became clear that debate would be more contentious than sponsors had expected.

One of the proposals, to begin making direct loans to colleges and universities with federal student-aid funds, was the subject of private meetings last week, and Republicans said they were working on an alternative to the plan put forward by the panel's Democratic majority.

In a letter to William D. Ford, the Michigan Democrat who is chairman of both the subcommittee and the full committee, Secretary of Education Lamar Alexander said he opposes replacing the current loan programs with a federally funded and federally monitored direct-loan program.

"My new management team and I have thoroughly reviewed this issue, and we are convinced that there are far too many problems, risks, and costs associated with such proposals," Mr. Alexander said in the letter.

Such a program, he predicted, would add $10 billion annually to the federal deficit, place all of the default risk on the Education Department, give schools with little or no experience the responsibility of handling federal funds, and involve heavy start-up costs and effort.

The other controversial provision would make Pell Grants an entitlement program. Republicans are expected to offer either an amendment striking the provision or a compromise involving a pilot program.

In action on the bill last week, the subcommittee approved an amendment offered by John F. Reed, Democrat of Rhode Island, to create a pilot program that would establish college-tuition-savings programs in up to five states.

In addition, the panel rejected amendments offered by:

  • Scott L. Klug, Republican of Wisconsin, to provide $500 Pell Grant bonuses to eligible students in the top 10 percent of their high-school graduating class or in the top 20 percent of their postsecondary class.
  • Tom Coleman of Missouri, the ranking Republican on the subcommittee, to allow postsecondary institutions to transfer 25 percent of their Perkins Loan, Work-Study, and Supplemental Educational Opportunity Grant funds among those programs.
  • Paul B. Henry, Republican of Michigan, to eliminate the Pell Grant program's ability-to-benefit test and instead require that all grant recipients first earn a high-school diploma or pass the General Educational Development test. --M.P. & L.H.

Vol. 11, Issue 06, Page 29

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