Panel Clears Bill Making Pell Grants an Entitlement

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WASHINGTON--The Senate Labor and Human Resources Committee last week unanimously approved a bill that would make the Pell Grant an entitlement.

The vote to send the measure, S 1150, to the Senate floor came after unsuccessful attempts to remove the Pell Grant provision and to replace the current system of federally subsidized student loans with a direct-loan proposal.

Debate on the measure, which would rewrite the laws governing higher-education and financial-aid programs, lasted only about an hour--a testament to the fact that the Senate bill is less ambitious than its House counterpart and that many committee differences were worked out in private.

Senator Edward M. Kennedy, the Massachusetts Democrat who is chairman of the committee, said the Senate measure, which rewrites the Higher Education Act, is the highest priority education bill for the committee.

It is "the linchpin in terms of higher education for this country," he added.

The bill, estimated to cost $17.4 billion in its first year, is expected to go to the Senate floor by Thanksgiving, as is its more radical and controversial counterpart in the House, HR 3553. The chambers' votes would set the stage for a conference early next year. (See Education Week, Oct. 30, 1991.)

Under the Senate bill, the Pell Grant entitlement would go into effect in the 1997 fiscal year, beyond the scope of current budget constraints. Under the House bill, the entitlement would go into effect in fiscal 1993 and double the cost of the program to $11 billion.

S 1150 suggests a boost in the maximum grant from $2,400 to $3,600 in fiscal 1993, and a $200 annual increase after that. The House bill calls for a maximum grant of $4,500 and increases tied to the Consumer Price Index in subsequent years. (See Education Week, Oct. 2, 19913 Senator Nancy Landon Kassebaum, the Kansas Republican who is the ranking minority member on the Education, Arts, and Humanities Subcommittee, offered an amendment that would have removed the entitlement. The amendment also would have made the reauthorization current for five years, instead of the seven proposed, and disallowed borrowing from future appropriations to pay for the grant, as proposed.

Giving Up Control

An entitlement, she said, would relinquish a measure of control over the program to budget panels, which can order other committees to change entitlement laws to save money.

Ms. Kassebaum urged her colleagues to wait and see if other provisions in the bill--including the increased maximum for Pell Grants and improvements in the studentloan program--would increase access to higher education.

Senator Orrin Hatch, the Ohio Republican who is the ranking member on the full committee, agreed, saying, "This decision to make the Pell Grant an entitlement flies in the face of future discretionary spending decisions that we on this committee will have to make."

Panel Democrats said, however, that the entitlement would give assurances to future students.

"The inclusion of this provision gets us down the road to doing something I have wanted to do for a long time--that is that higher education should be a matter of right to any youngster who has the ability, energy, and will to absorb that education," said Senator Claiborne Pell, the Rhode Island Democrat who chairs the subcommittee.

The amendment failed on a 6-to-1 vote. Senator James Jeffords, Republican of Vermont, was the only Republican to vote against the amendment.

Request for Delay

Senator Paul Simon, Democrat of Illinois, asked the committee to postpone until next year consideration of the bill so committee members could study a direct-loan plan that he devised with Senator Dave Durenberger, Republican of Minnesota.

Under the plan, the Education Department would make loans directly to students, without the assistance of banks, which now receive federal subsidies for offering students low-interest loans.

The Internal Revenue Service would then collect the repayments through the tax-withholding system, according to the plan, and the rate of repayment would vary according to income.

The proposal would also have further increased the size of Pell Grant awards.

But other senators rejected the suggestion, saying that they did not want to derail the reauthorization process. No vote was taken on Mr. Simon's proposal Mr. Kennedy and Mr. Pell assured Mr. Simon, however, that they would hold hearings on the plan, in addition to one held last week, and study it further before the Senate meets the House in conference.

The House bill also includes a direct-loan program, and Mr. Kennedy said the Senate would be forced to address the issue at that time.

Vol. 11, Issue 10, Page 24

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