NAICU Washington Update

House Going Through the Budget Motions

April 11, 2014

The House of Representatives passed a fiscal year 2015 budget resolution April 10 reflecting House Budget Committee Chairman Paul Ryan’s (R-Wis.) “Path to Prosperity” proposals. The plan sticks to the $1.058 trillion spending cap set in the January budget deal, but makes additional cuts to entitlement spending to appease members who want even less government spending.

H. Con. Res. 96 passed the House largely along party lines by a vote of 219 to 205, but the Senate is not expected to write or take up a budget resolution because Senators consider it unnecessary with the statutory cap enacted in January. The nonbinding congressional budget resolution traditionally serves as a blueprint for the federal budget process in the House and Senate, providing the appropriations committees with fiscal targets. While the House budget resolution will die in the Senate, some of the ideas found in the resolution could be picked up in future appropriations bills or during the reauthorization of the Higher Education Act.

The student aid funding proposals in the resolution are recycled from past versions of Rep. Ryan’s budget plan. Wrapped in language about financial sustainability for the Pell Grant program and targeted aid to the neediest students, the resolution would eliminate all mandatory funding for Pell Grants, while freezing the maximum grant at $5,730 for the next 10 years, without providing additional discretionary funds to sustain it. In addition, the resolution would: save money in the Pell Grant program by eliminating eligibility for certain groups of students, lower the auto-zero income level, revert income protection allowances to pre-2007 levels, impose a maximum income cap for eligibility, and eliminate eligibility for less-than-half-time students.

To save money on student loans, the plan would repeal the expansion of income-based-repayment (IBR), and eliminate the in-school interest subsidy for undergraduate student loans. Rep. Ryan argues that IBR disproportionately benefits graduate and professional students, and that there is no evidence that the undergraduate subsidy is critical to going to college.

Similar tweaking of eligibility and student loan changes have made it through appropriations and budget deals in the past, so NAICU will keep an eye on these ideas as other committees consider higher education issues throughout the year.

The next steps in the FY 2015 congressional funding process is the writing of the 12 appropriations bills, including the Labor-Health and Human Services-Education bill. Both House and Senate subcommittees hope to have bills done by mid-July.  NAICU will provide updates as necessary.

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