Citizens for Responsible Education Reform

Higher Education Authorization Act

Pell Grants, Student Loans, Work Study

Issue Description

The Subcommittee on Postsecondary Education, Training, and Lifelong Learning intends to mark up legislation authorizing the 1965 Higher Education Act (HEA) this spring. Last fall, the committee held hearings across the country to find out how the law is working for parents and students and to obtain advice from national experts in higher education. HEA authorizes federal student aid in the form of Pell Grants, Federal Family Education Loans, Direct Loans, work study programs, and various institutional grants for student services and technology development. The bill will address keeping the cost of a college education affordable, simplifying the student aid system, and stressing academic quality. Authorization for HEA expires this year.

The Subcommittee intends to incorporate H.R. 2536 into the Higher Education Authorization Act. The bill would overhaul the current financial aid system by establishing a business-like, performance-based organization run by experienced professionals to manage all aspects of the federal student aid delivery system.

CRER Analysis and Position

With the costs of higher education spiraling nearly out of reach for many Americans, CRER supports continued funding of Pell Grants. In H.R. 2264, the Labor/HHS/Education Appropriations bill, Congress increased the maximum Pell Grant award every year, to an all-time high. The House passed a further $500 million increase in the Pell Grant program to help independent students, and a $30 million increase for College Work Study.

Students earning modest salaries after leaving college can deduct interest paid on their student loans during the first 60 months of repayment beginning with $1000 in 1998 and increasing by yearly increments of $500 to a maximum of $2500 in 2001. (Taxpayer Relief Act of 1997 -- H.R. 2014)

The Emergency Student Loan Act of 1997 (H.R. 2535) will allow students to immediately consolidate their student loans in order to avoid hundreds or thousands of dollars in extra interest payments, obtain other credit such as a mortgage, and in some cases avoid defaulting on their student loans. This emergency legislation was approved by the House Education and the Workforce Committee on October 1, 1997 by a vote of 43-0.

CRER believes, however, that it is incumbent upon colleges and universities to look at ways to keep tuition inflation under better control. Tuition for higher education has significantly outpaced the general inflation rate in recent years, and until the university community addresses this concern, funding programs will continue trying to play catch up.

CRER believes private scholarship programs should be stressed within high school guidance programs as well as college financial aid offices. At the same time, we are strongly opposed to programs designed to give government "scholarships" to students for maintaining a B average or for simply behaving and going to classes. This would very likely cause significant grade inflation, or a dumbed down curriculum, or both. Colleges and universities are not going to lose money if students can't keep pace; thus, they are sure to see to it that the money, and the student(s), are not turned away.

For additional information on this issue, visit:
S. 1882 -- Higher Education Amendments of 1998, Summary of Provisions, April 1, 1998
Bill Includes Key Provisions to Save Student Loan Program & Create New Quality Teaching Initiative
Higher Ed. Bill Gets Administrator Training Amendment (story from AASA)
The Education Resources Institute
The Emergency Student Loan Act of 1997, press release

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Last updated by Citizens for Responsible Education Reform on 5/2/98
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