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Congress Ponders Proposal To Include Student Aid in Block Grant

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Negotiations are under way between the House Republican leadership and some Republican governors over a proposal to turn over student-aid programs to the states.

The proposal, first discussed two weeks ago, suggests that Pell Grants, the federal work-study program, student-loan programs, and other aid programs--currently worth about $33 billion a year--be replaced with a block grant that would also consolidate numerous federal job-training programs.

"We just want people to start thinking about this," said John Truscott, a spokesman for Gov. John Engler of Michigan, who presented the proposal to the House leadership.

Doug Stites, the chief executive officer of the Michigan Jobs Commission, which developed the proposal for Governor Engler, said it was inspired by a General Accounting Office report that counted 163 programs geared toward workforce development. (See Education Week, Jan. 18, 1995.)

"If we can spend this amount of money, what kinds of programs should we be spending them on?" Mr. Stites said. "I don't favor or oppose any one particular program. I think it should all be on the table."

Next on the Schedule

Mr. Stites and Mr. Truscott said that their discussions with lawmakers are still in the preliminary stages but that the issue could surface on Capitol Hill soon.

The House Committee on Economic and Educational Opportunities and its Subcommittee on Postsecondary Education, Training, and Lifelong Learning have been holding hearings on job training over the past several weeks. Now that the committee has completed its work on welfare reform, it is expected to turn to that issue next.

But it is unclear whether a higher-education block grant would be favorably received--even by Republicans.

An aide to Rep. John R. Kasich, R-Ohio, the chairman of the House Budget Committee, said such a block grant is not "all that realistic."

Rick Jerue, the Democratic education counsel on the House education panel, said that neither Democrats nor Republicans on the committee have expressed much interest in the proposal.

Victor F. Klatt, the Republican education coordinator for the committee, was noncommittal.

"At this point, we're taking a look at everything," he said. "Governor Engler has already put forth a whole series of interesting ideas, and we'll certainly take a look at this and other ideas as we move toward marking up a bill."

In the Senate, Sen. Nancy Landon Kassebaum, R-Kan., has introduced legislation to consolidate federal job-training programs. But aides from both parties said there has been no discussion in the Senate of bringing student-aid programs into the mix.

Skeptical Reviews

Other observers were openly skeptical of the proposal to turn control of student aid over to the states--which presumably could decide to forgo making loans in order to fund other training initiatives. Currently, any student can obtain a federally backed loan, and anyone meeting income criteria can obtain a subsidized loan.

"It sounds like another very much off-the-wall idea," said David R. Merkowitz, a spokesman for the American Council on Education. "It doesn't reflect any real understanding about how student aid works. There's kind of a romance about the states...but I don't know how they'd be able to administer something like this."

Edward M. Elmendorf, the vice president for government relations for the American Association of State Colleges and Universities, said some aid programs could be folded into a block grant that would likely allow better administration at the state level. But he said states would have to be ready to continue to meet public demand.

While some state guarantee agencies feel they could operate a successful loan program independent of the federal government, he said, it is unclear how states would monitor for waste, fraud, and abuse.

And the bottom line, he said, is whether states would maintain the longstanding federal commitment to increasing access to higher education.

"Will these states adhere to and continue to increase the amount of money and participation for these programs?" Mr. Elmendorf asked.

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