The House Education and Labor Committee has added a provision that would make Pell Grants an entitlement to legislation aimed at reducing defaults in the student-loan program.
“This begins a fairly slow process of ratcheting back to the original intent of Congress’’ to provide grants for low-income students and loans to middle-class students, Representative Pat Williams, Democrat of Montana, said at a subcommittee markup of the bill.
Mr. Williams, chairman of the postsecondary-education subcommittee, is the primary sponsor of HR 4986, which would ensure that every eligible student received the maximum Pell Grant, forcing the Education Department to borrow money if the Congress failed to appropriate enough.
Representative E. Thomas Coleman of Missouri, the ranking Republican on the subcommittee, tried at that level and again before the full committee to delete the Pell Grant provision, which he said was too costly and did not address the default problem.
In a letter to Representative Augustus F. Hawkins, Democrat of California and chairman of the Education and Labor Committee, Secretary of Education William J. Bennett said he would urge President Reagan to veto the House measure.
‘Lack of Sanctions’ Cited
Mr. Bennett objected to the Pell Grant provision, the bill’s “lack of effective sanctions,’' and a provision that would prevent the Education Department from making institutions ineligible for student-aid programs solely on the basis of default rates. The department is expected to propose regulations that could disqualify institutions with default rates above 20 percent.
The controversial entitlement provision is the most significant difference between the House bill and the measure the Senate Labor and Human Resources Committee is expected to debate soon, S 2647.
Both bills would:
- Require institutions, lenders, and guarantee agencies with high default rates to enter into default-management agreements with the Education Department;
- Mandate greater exchange of information among organizations involved with aid programs and credit agencies;
- Institute a waiting period during which recipient institutions could not cash loan checks, to ensure that students are actually enrolled;
- Require multiple disbursements of loans;
- Tighten accreditation rules for institutions, the definition of an independent student, and “ability to benefit’’ rules allowing students without high-school diplomas to receive student aid;
- Deny transcripts to borrowers in default; and
- Eliminate consideration of non-liquid assets such as homes in determining eligibility.
