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Democrats Drop Plan To Make Pell Grant an Entitlement

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WASHINGTON--Democrats on the House Education and Labor Committee have abandoned an attempt to make Pell Grants an entitlement, and have exacted support for a pilot direct-loan program from the panel's leading Republicans.

Those decisions pave the way for floor consideration as early as this week of legislation to reauthorize the Higher Education Act, which governs student financial-aid programs.

HR 4471, introduced last week by Representative William D. Ford, the Michigan Democrat who chairs the House committee, replaces HR 3553, the original reauthorization bill.

Lawmakers have been at odds over HR 3553's Pell Grant and direct-loan provisions since it was reported out of committee last fall. The bill called for a Pell Grant entitlement beginning in the 1993-94 academic year and for a direct-loan program, in which students would receive loans directly from the federal government via their respective institutions, to replace the Stafford Student Loan program.

An aide to Mr. Ford said the chairman and other entitlement proponents could not drum up enough support for the provision, which had drawn a veto threat from the Bush Administration.

That opposition was echoed by House Republicans, led by Representatives Bill Goodling of Pennsylvania and Tom Coleman of Missouri, the ranking Republicans on the full committee and the Postsecondary Education Subcommittee, respectively.

Some Democrats, including Speaker of the House Thomas S. Foley of Washington and Representative Leon E. Panetta of California, the Budget Committee chairman, also expressed reservations about the entitlement.

Supporters in the Senate likewise failed to win backing for a provision calling for an entitlement beginning in the 1997-98 academic year, and pulled it from the Senate's H.E.A. bill before it went to the floor.

Direct-Loan Compromise

An aide to Mr. Coleman said he agreed to a pilot direct-loan program, despite objections by the Administration, because it appeared to be the best way of achieving bipartisan support for the bill. As early as last fall, Mr. Coleman sought a compromise that would establish a 100-school pilot program.

"We didn't want an open-ended program,'' the aide said. "We wanted a bill, and we wanted one we could support.''

The new program would solicit volunteer institutions and have a loan capacity of $500 million. It would begin in the 1994-95 academic year and be re-evaluated, along with all other components of HR 4471, after the 1997-98 academic year.

Etta Fielek, a spokesman for Secretary of Education Lamar Alexander, said the Administration remains opposed to direct loans.

"There has been no change in the Administration's position,'' she said.

But Democratic and Republican aides predicted that Mr. Bush would be less likely to carry through on his veto threat now that the direct-loan program has been scaled back.

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