NAICU Washington Update

House Sends Drastic Student Aid Cuts to Senate

February 19, 2011

After three days of debate on over 500 amendments, the House of Representatives passed H. R. 1, the FY 2011 Continuing Resolution (CR), by a roll call vote of 235 to 189, and made drastic cuts to the core student aid programs.

The bill cuts the Pell Grant maximum by $845, and eliminates all funding for SEOG and LEAP. If enacted, provisions would be effective this July 1, resulting in a $4,705 Pell Grant maximum for the 2011-12 academic year, and no SEOG or LEAP funding for the coming academic year.

The government is currently operating under a CR that expires March 4.  This bill would be a permanent funding vehicle for the rest of the federal 2011 fiscal year, which ends September 30. The bill cuts $100 billion from the President's proposed spending levels, allowing the new Republican majority in the House to fulfill its campaign pledge to cut spending.  An earlier Republican draft of the bill would have instead cut $60 billion, but conservative members of the caucus balked, sending Appropriations Chairman Hal Rogers (R-Ky.) back to the drawing board to find deeper cuts.

The bill will now go to the Senate, where anything could happen.


Several amendments of interest to higher education were also approved by the House.  House Education and the Workforce Committee Chairman John Kline (R-Minn.) offered an amendment barring the new Department of Education "gainful employment" regulations from going into effect, and restricting the department from issuing any new regulations on gainful employment.  The amendment was approved on a roll call vote of 289-136, with one member voting present.  This amendment doesn't affect implementation of other new rules, such as those on credit-hour definition, state authorization, or misrepresentation.

The House also made good on campaign promises to work toward overturning the new health care reform bill.  An amendment passed that would defund the enacting legislation. The health care reform bill also included changes to the student aid programs that "piggybacked" on that bill, including the mandated conversion to direct loans and additional resources for the Pell Grant program. 

This amendment could put the availability of student loans, and the additional funding stream for Pell Grants from the bill, in jeopardy. Such a cut to Pell would be in addition to the $845 cut to the maximum Pell Grant in the underlying bill, H.R. 1. Department of Education lawyers are investigating the impact of this amendment on both the Pell program and the student loan program.

Next Steps

Next in the process is for the Senate to take up the House bill.  Current rumors are that they will work from a plan that implements a five-year freeze on discretionary spending.  While this is a higher spending ceiling than the House, the Senate will still need to make cuts to reach their target, even before beginning negotiations with the House. The Senate version is likely to include its own student aid cuts.  For example, we know that the Senate-drafted omnibus bill from December included the elimination of LEAP funds, and some Senate staff have indicated SEOG is a target.

Looking down the road at a possible end game, a government shutdown is no longer out of the question.  Both the House and the White House put down their markers this week, with Speaker of the House John Boehner saying he will not allow a short-term CR to pass at current funding levels, and President Obama issuing a veto threat on H.R. 1 if it reaches his desk in its current form.  With the House and Senate in recess next week, and the current CR expiring March 4, it's not clear that the Senate would be able to create a new version of a CR without additional time.

What can colleges do?

NAICU is encouraging members to take advantage of their congressional delegations being home the week of February 21 to meet with them locally or on campus, and to talk about the impact of the H.R. 1 cuts on their low-income students, their institution's fiscal stability, and the local economy.

MORE News from NAICU