Partisan Contrast in Spending on Student Aid

Spending bill approved by Democratic appropriators proposes increases for Pell Grants, work-study and direct aid to colleges, but Republicans balk at price tag.

May 9, 2019
 
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Democrats in the U.S. House of Representatives are moving forward with spending proposals that make for a clear contrast with the White House on student aid, for-profit colleges and support for minority-serving institutions.

The appropriations committee approved a bill by a 30-to-23 margin Wednesday to fund the Education Department as well as the Departments of Labor and Health and Human Services. It’s the first chance Democrats have had to craft a spending bill since they took over the House after the midterm elections.

The bill would boost the maximum Pell Grant award by $150, to $6,345. The White House budget proposal would provide flat funding for Pell.

Democrats would add $304 million to the Federal Work-Study program and $188 million in new money for Supplemental Educational Opportunity Grants. The Trump proposal called for cutting funding to work-study by 56 percent and eliminating the SEOG program entirely.

The bill also seeks $1.16 billion in spending on the TRIO program, $210 million above the White House request.

The proposed boost to Pell Grants is roughly the same size as other increases in recent years. But proposals over all go beyond previous spending deals, with significant increases to student aid programs.

The Democratic bill also calls for more scrutiny by the Education Department of for-profit colleges and student loan servicers. And it seeks changes to the department's handling of the Public Service Loan Forgiveness program to make sure borrowers are not improperly denied debt relief because of errors by loan servicers.

“We have an opportunity to reinvest in the American people and the programs on which they rely,” Rosa DeLauro, a Connecticut Democrat and chair of the House appropriations subcommittee on labor, health and human services, and education, said before a hearing on the bill.

Several top Republicans on the committee quickly said the bill, which encompasses numerous programs besides student aid, had little chance of passing in its present form because of the large price tag. At roughly $189.9 billion, the bill is an increase of 6 percent in spending across the board. Representative Tom Cole, an Oklahoma Republican and ranking member on the subcommittee, said such a large increase is not likely to be accepted by the Senate or White House.

“I fear it sets us up for another yearlong [continuing resolution],” he said in comments at the hearing. “Or a government shutdown at worst.”

Boosting Existing Programs

Congress has for two straight years ignored calls from the White House for drastic cuts to domestic programs. But the Democrats’ proposal goes even further in pushing for large increases to student aid and other programs. The SEOG program, for example, saw a $107 million increase in a 2018 omnibus spending bill. The Democrats’ proposal calls for increasing spending by $188 million.

The Trump administration also has proposed significant changes to the structure of programs like Federal Work-Study and Pell Grants. The administration has sought to shift the allocation of work-study funds, for example, and to open up Pell to short-term programs lasting less than 15 weeks, the current minimum for eligibility. The Democrats’ bill by contrast largely doubles down on existing aid programs.

“Advocates for students and colleges have been very grateful that both Republicans and Democrats have come together to reject calls from the administration to slash funding for these programs, and instead providing critical boosts in support two years running,” said Jessica Thompson, director of policy and planning at the Institute for College Access and Success. “We are very glad to see House appropriators continue that trend for a third year by proposing modest but crucial investments to keep need-based grants and work-study at least on pace with inflation. We hope the Senate follows suit.”

The House spending bill also would provide $241 million in new funding for historically black colleges and other institutions that primarily serve minority students.

The Thurgood Marshall College Fund last week called the bill a “historic investment” in historically black colleges and higher education as a whole. In particular it praised the proposals for new spending on SEOG and Pell Grants. The group called on the House and Senate to approve the Democrats’ proposals.

More Progress for Pell?

The $150 increase to the maximum Pell Grant is almost enough to keep up with inflation. But the problem for low-income students is that the cost of college has outpaced inflation, said Carrie Warick, director of policy and advocacy at the National College Access Network.

“The loss in purchasing power is really a result of the dramatic increase in the cost of higher education,” she said.

The Pell Grant now covers less than a third of the price of attending a typical four-year institution. NCAN has recommended that Congress commit to increases over 10 years that would boost the grant’s purchasing power to 50 percent of the price.

While Democrats didn’t make that kind of commitment in the appropriations bill, NCAN and other advocates for student aid plan to push for long-term increases to the Pell Grant in the reauthorization of the Higher Education Act. Warick said the group will push for the Senate to at least match the House proposal for Pell Grants in the appropriations process.

New Demands for Oversight

The appropriations bill also includes language demanding tougher scrutiny of for-profit colleges.

The legislation directs the department to provide updates on borrower-defense applications on a monthly basis. The most recent quarterly report released by the Trump administration showed the department hasn’t approved or denied any borrower-defense claims submitted by student borrowers since June of last year.

The bill would also require the department to disclose the process it uses to oversee nonprofit conversions by for-profit institutions. And Democrats want the department to maintain a list of any institutions that have changed tax status on the Federal Student Aid website.

Lawmakers also pushed for quicker action on for-profit colleges that are on the brink of closure. Legislative language directed the department to outline a plan for preventing other abrupt closures. And it demanded that the Office of Federal Student Aid publish a list of colleges that have provided the department collateral through the form of a letter of credit from the 2017 to 2019 fiscal years.

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