Modest Increases for Student Aid, Research in Spending Bill

December 17, 2015

Congressional leaders early Wednesday morning unveiled the details of a government spending bill that would boost some student aid and federal research funding.

The spending deal would allow the maximum Pell Grant to increase by $140 to $5,915 for the 2016-17 academic year. Funding for the TRIO program would jump by $60 million to $900 million, and the GEAR UP program would receive $322.8 million, a $21 million boost from the current year.

Campus-based aid programs like the Supplemental Educational Opportunity Grants and Federal Work-Study would continue to be funded at their current levels.

The legislation boosts spending on the National Institutes of Health by nearly $2 billion, to $32 billion. The National Science Foundation would receive $7.5 billion, a $112 million increase from its current level.

The bill, which is expected to clear the House and Senate this week and ultimately be signed by President Obama, would fund the federal government through next September.

It does not contain any provisions that block the Obama administration’s higher education regulations -- such as its gainful employment rule, aimed at for-profit colleges -- as some Republicans had been seeking.

And The New York Times reported that a provision that would have benefited the for-profit college chain Education Management Corporation in a dispute with its bondholders over its debt restructuring was ultimately dropped from the bill.

The spending bill also contains a provision that would change how the Education Department hires companies to process student loan payments. The change would likely reduce the department’s reliance on its current four large loan servicers -- Navient, Nelnet, Fed Loan Servicing (PHEAA) and Great Lakes -- and boost servicing business for nonprofit state loan agencies.

In addition, the bill would increase the amount of money that guaranty agencies that insure old federal student loans under the bank-based lending program receive from the Education Department when borrowers default on their loans. Lawmakers also instructed the department to produce a report detailing how it will help those guaranty agencies, whose loan portfolios have shrunk since the Obama administration’s switch to 100 percent direct lending.

Lawmakers separately released late Tuesday a deal on tax legislation that would make permanent the American Opportunity Tax Credit as well as extend the tuition tax deduction.

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