NAICU Washington Update

Congress Kills Earmarks, Puts Student Aid Funding on a Rollercoaster

December 22, 2010

After months of negotiating and a few days of a stand-off, the 111th Congress finalized the FY 2011 spending bills by passing a continuing resolution.  The CR will keep the government open until March 4, 2011.

The final bill includes mostly good news for student aid, as Congress once again reached deep into their empty budget pockets to make up for a new Pell Shortfall of $5.7 billion.  This infusion of money makes it more likely that Congress will be able to keep the maximum Pell Grant level at $5,550 for the next academic year. Without the funding, there was widespread worry that all Pell Grants would be dramatically cut next year, and that some students would lose their aid all together. Congress also level funded the campus-based aid programs LEAP, TRIO and GEAR UP.

The final bill did not come easily in the tumultuous 2010 lame duck session. The House had hammered out tough compromises in passing the CR, only to see the deal fall apart in the Senate Thursday, December 16, when a Tea Party grassroots anti-earmark lobbying effort peeled away some of the Republican votes needed for passage.

At that point, a simple CR set at last year's spending levels, and funding the government until February was approved instead. But then on Friday afternoon, it was the House's chance to rebel, extending current funding of the government until Tuesday, December 21, to give the Senate one more chance to pass something more than a simple CR.

Over the weekend, a second compromise emerged in the Senate, which included the Pell money, among other things. Though beset with its own legislative hiccups, the bill was eventually passed by the Senate on Tuesday, and approved by the House a short while later.

However, in various versions of the bill, the LEAP program - which guarantees that private colleges students participate in state need-based aid programs - was almost zeroed out.  The near loss of hundreds of dollars of Pell Grant funding for every Pell recipient is a warning call for all of higher education.  Student aid funding is not guaranteed, and unless we all work together to keep these programs bi-partisan, they could be cut again  - as early as next March.

When the 112th Congress convenes in January, the top budget priority will be to bring spending down to FY 2008 levels - a $100 billion cut from the current level.  This puts the campus-based aid programs and LEAP at the top of the chopping list. We will need to work harder than ever to make the case to Congress that, in addition to the Pell Grant program, the other student aid programs are extremely important, serve specific purposes, and make thousands of dollars of difference to individual students.

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