The Senate passed an H.E.A. bill, S 1150, last month.
The House last week passed a bill to expand access to federal financial-aid programs under the Higher Education Act.
The bill, which would allow students from families earning as much as $49,000 to receive a Pell Grant and permit all students, regardless of family income, to take out a Guaranteed Student Loan, passed on a vote of 365 to 3..
Students from families earning up to $78,500 would be eligible for an in-school interest subsidy on their loans under the bill, HR 3553, while students from wealthier families could receive unsubsidized loans under a new program.
The legislation also would increase the maximum authorized Pell Grant to $4,500 and tie subsequent increases to the Consumer Price Index. In addition, it calls for expansion of teacher-training and early-intervention programs.
Two controversial provisions approved by the Education and Labor Committee were dropped before the bill hit the floor. The proposals would have made the Pell Grant program an entitlement, not subject to the annual appropriations process, and replaced the Guaranteed Student Loan program with direct loans made by the federal government to students through institutions, bypassing the banks that currently operate the program.
Representative William D. Ford, the Michigan Democrat who is chairman of the education panel, reluctantly agreed to scale back the plan to a pilot program, for which the Secretary of Education would select a group of institutions with a total loan volume of $500 million under the current G.S.L. program.
Both the Pell Grant and direct-loan provisions were top priorities for Mr. Ford, who said he had hoped that the Congress would approve a change in the 1990 budget agreement allowing the transfer of funds from defense to domestic programs, potentially freeing up funds.
Ford Disappointed
“While this bill certainly represents a step forward, I had hoped that it would be a stride or leap forward,’' he said.
Mr. Ford was also forced by the Democratic leadership to retain loan-origination fees in order to pay for the bill’s program expansions.
However, he was also able to add a new provision eliminating a restriction on borrowers under 21 that was adopted in an unemployment compensation bill over his objections. Under HR 3553, such borrowers would no longer need a co-signer.
Republicans said the modified bill is much better than one that emerged from Mr. Ford’s committee last fall. They had opposed both the Pell entitlement, estimated to cost $12 billion in its first year, and the direct-loan program as too costly.
Representative Tom Coleman, the Missouri Republican who is the ranking member on the House Postsecondary Education Subcommittee, said Republicans would accept the scaled-back direct-loan program if its loan volume were capped at $500 million--a compromise they thought Mr. Ford had agreed to. But the program’s supporters turned back his attempt to impose such a cap with a procedural maneuver.
The Bush Administration has issued a veto threat against the bill largely because of the pilot. The Administration also objects to expanding the Pell and loan programs.
Before voting for passage of the bill, the House approved amendments establishing a Veteran Teacher Corps to aid veterans interested in becoming teachers, removing requirements that states review institutions for educational quality and financial responsibility, and prohibiting program participation for proprietary schools that receive more than 85 percent of their revenue through federal aid.
Amendments extending loan deferments for teachers, allowing less-than-half-time students to participate, and authorizing the Education Department to borrow from the following year’s appropriation rather than reducing Pell Grants were turned back on procedural motions.
Also defeated were amendments to set achievement requirements for aid recipients and eliminate rules that allow some students without high-school diplomas to participate.
The Senate passed an H.E.A. bill, S 1150, last month.
