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Senate Appropriations Committee Protects Our Shared Economic Future by Preserving Funding and Eligibility for Pell Grants

Jun 20, 2012

By Vickie Choitz

On June 14, the Senate Appropriations Committee approved the Fiscal Year 2013 Labor, Health and Human Services, Education, and Related Agencies bill that sets funding levels for key federal education and training programs starting in October 2012. The Committee stood up for students and preserved funding for the Pell Grant program  without making harmful eligibility cuts. The Committee also accepted an amendment from Senator Murray to partially reverse the devastating “Ability to Benefit” eligibility cut made in the FY 2012 appropriations bill.

This action is an important step in protecting students’ access to financial aid so they can earn a postsecondary degree or credential, helping them land a better job and earn higher wages to support their families. It’s also an important move toward ensuring employers have the skilled workers they need. By 2018, an estimate two-thirds of jobs will require some postsecondary education.  Key items on student aid funding include:

  • Restores financial aid eligibility for students without a high school diploma or its equivalent who are enrolled in eligible career pathway programs and can demonstrate their “ability to benefit” from postsecondary education.
  • Increases the maximum Pell Grant by $85 to $5,635 (this is a “scheduled” increase for the 2013-2014 school year, but would only take effect if there is adequate funding).
  • Makes a down payment on the $6 billion funding gap that will result in Fiscal Year 2014 due to Congress not keeping up with regular appropriations to the program and the depletion of stop-gap funding from last year (the $6 billion gap assumes that the Pell Grant program gets to keep $1.8 billion left over from overestimating recent student need). The bill contributes $3.5 billion toward this down payment with savings in three areas:
    • Limits how long a new student borrower in the subsidized Stafford loan program can get an interest subsidy on his or her loan while in school to 150 percent of the normal time to complete the program, i.e., 6 years for a four-year program. After this time limit, the student would be responsible for paying the loan interest.
    • Reduces the amount of fees that loan agencies can receive for rehabilitating defaulted student loans.
    • For students who are enrolled in distance learning-only programs, limits the costs a Pell Grant can cover to only the direct costs of tuition, fees, books, and supplies (excludes room and board).
  • Prohibits all colleges and universities receiving federal postsecondary funding through the Higher Education Act from spending any of it on advertising, marketing, and recruitment (they can spend other dollars on these activities).
  • Supports  reforming the allocation formulas for the Federal Work Study and the Supplemental Educational Opportunity Grant (SEOG) programs to redirect funds to lower-priced institutions that enroll and graduate higher numbers of Pell-eligible students, but does not include specific recommendations. Appropriates $150 million in new funds for enhanced work-study programs that work more closely with employers.
  • Allocates $39 million for the First in the World initiative proposed by the Obama Administration in February, but does not fund the Administration’s proposed Race to the Top: College Affordability and Completion initiative.
  • Provides level funding for TRIO programs and the Child Care Access Means Parents in Schools (CCAMPIS) programs.

The bill also provides level funding for critical education and training programs and provides competitive grants through the Workforce Innovation Fund to improve the delivery of job training and education programs.

The process isn’t over yet, though. The House of Representatives has not yet scheduled its mark-up of the Labor, Health and Human Services, Education, and Related Agencies appropriations bill. For the Senate funding levels and reforms to become law, the House and Senate would have to come to an agreement on funding levels and policy changes like Ability to Benefit eligibility included in the final appropriations bill.

For more information about how the elimination of Ability to Benefit harms students and innovation, view Eliminating “Ability to Benefit” Student Aid Options Closes Door to College Credentials for Thousands and Undermines Innovation>>

For answers to Frequently Asked Questions about the impact of ATB elimination on current and future students, view FAQs on How the Loss of Ability to Benefit Options in Federal Student Aid Affects Those without a High School Diploma>>

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