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Democrats Drop Proposal To Make Pell Grants an Entitlement

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WASHINGTON--The Senate was poised to approve legislation reauthorizing the Higher Education Act late last week, after Democrats dropped a controversial proposal that would have made the Pell Grant an entitlement beginning in the 1997 fiscal year.

Senate debate on the other contentious issue in the reauthorization--a proposal for a direct-loan program for college students--was deferred until it is considered by the Finance Committee, clearing the way for easy passage of 1150.

The decision to drop the entitlement provision was made just before the bill was brought to the Senate floor Feb. 20.

An aide to Senator Claiborne Pell, the Rhode Island Democrat who chairs the Subcommittee on Education, Arts, and Humanities, said the provision was scrapped because a point of order threatened to block the entire bill and because proponents were unsure if the provision would survive a pending amendment to strike it.

"It became too big of a risk," the aide said.

Other changes to the student grant program remained in the bill.

They include an increase in the maximum authorized grant to $3,600, and the addition of $200 to that level annually; elimination of home and farm equity from need calculations for students from middle income families; and expansion of eligibility to students from families earning up to $42,000. ('See Education Week, Oct. 30, 1991.)

Entitlement Hopes Dim

The chief sponsors of S 115 O--Mr. Pell and Senator Edward M. Kennedy, Democrat of Massachusetts and the chairman of the Labor and Human Resources Committee--argued that a Pell Grant entitlement, which would require the federal government to give every eligible student a grant, would help reduce students' reliance on loans.

The Senate's action dims hope that such an entitlement can be enacted, as it is expected to also influence floor consideration of the House reauthorization bill, HR 3553.

That bill calls for a Pell Grant entitlement to go into effect in fiscal year 1993, but support for it among House Democrats is suspect because of the cost. (See Education Week, Oct. 2, 1991.)

Before taking their bill to the floor, House Democrats are waiting to see if the Congress reopens budget talks with the Administration or seeks to breach the Budget Enforcement Act of 1990 in an attempt to shift funds from defense to domestic programs. Such actions would leave open the possibility of funding a Pell entitlement.

However, an aide to Representative William D. Ford, the Michigan Democrat who chairs the House Education and Labor Committee, said that the bill will likely be taken to the floor within two months regardless of what happens on the budget front, because a lengthy House-Senate conference is expected.

Direct Loans

The House bill also includes another controversial provision--a plan to allow colleges to make loans directly to students, bypassing banks. Mr. Ford is negotiating a more modest compromise, and it is unclear exactly what proposal will be debated on the House floor.

Senator Paul Simon, Democrat of Illinois, has backed a similar plan, but decided last week not to offer his proposal as an amendment to S 1150.

Mr. Simon said he would instead attempt to attach the measure to an omnibus tax bill being fashioned by the Senate Finance Committee.

That committee needs to review the matter because Mr. Simon's plan would require the Internal Revenue Service to deduct student-loan repayments from a student's earnings.

The aide to Mr. Pell said the amendment was not considered under S 1150 because Senator Robert C.

Byrd, Democrat of West Virginia and the chairman of the Appropriations Committee, objected and because other Democrats raised concerns over the implementation of such a program.

A spokesman for Mr. Simon said his plan would be available to students regardless of their income, repayable at rates determined by future earnings, and would be administered by individual schools and the Education Department.

The program would not replace the current Guaranteed Student Loan program, the spokesman said, and would be available to a limited number of schools at first.

Both the House and Senate bills also include less contentious provisions for teacher-training programs and early-intervention aid to encourage high-school students to attend college.

S 1150, as considered last week, also would repeal a law requiring lenders to check the credit of all students older than 21. The law had been attached last year to a bill extending unemployment insurance.

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