House Appropriations Bill Threatens Low-Income Students

Bill Cuts Funding and Eliminates Regulations

SOURCE: AP/Lloyd Gallman

Labor force statistics show that individuals with a college credential are substantially more likely to be employed than those with only a high school diploma. Depriving individuals of Pell Grants will only serve to deepen the impact of the recession.

By Julie Margetta Morgan | October 11, 2011

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Last week, House Republicans released a 2012 appropriations bill that would determine the funding for the Departments of Labor, Education, and Health and Human Services. The bill serves up a double whammy against low-income students: it cuts funding for financial aid and also eliminates the regulations that would make sure colleges give these students what they paid for.

The House Appropriations Committee claims that the bill eliminates wasteful spending and protects the most vulnerable Americans. But its contents contradict those statements. In fact, it eliminates funding for vulnerable Americans through cuts to the Pell Grant and protects the interests of big businesses by letting colleges (particularly for-profit ones) off the hook for their students’ poor outcomes.

With a $2.3 billion cut to the Pell Grant program, the House bill would deprive low-income Americans of the money they need to attend college. The savings come from changes to the rules for student eligibility that would eliminate grants for about 1 million students.

Some are intricate changes to the way the Department of Education evaluates a family’s financial need—changes that would freeze out a whole group of students who cannot afford college without financial assistance. Other modifications would limit the Pell program to traditional students, leaving out working learners who attend college less than half time or who take longer to complete a degree.

With unemployment above 9 percent and long-term joblessness particularly high, Congress should be doing everything in its power to put people into jobs. Labor force statistics show that individuals with a college credential are substantially more likely to be employed than those with only a high school diploma. Depriving individuals of Pell Grants will only serve to deepen the impact of the recession.

Congress must find a way to address the high cost of the Pell Grant program. But it can be done without placing all of the burden on the students who can least afford to pay. The House could have eliminated another expense to pay for Pell in the short term, as the Senate did by cutting out student loan interest subsidies during the six-month postgraduation grace period. Or it could take steps to ensure that federal dollars won’t go to colleges that spend them irresponsibly.

Instead, the House chose to block the Department of Education’s efforts to stop wasting federal financial aid at colleges that leave their students mired in debt, inflate their credit hours to gain access to more federal money, or refuse to comply with state authorization requirements. It prohibits implementation of the gainful employment rule, the credit hour definition, and the state authorization rule.

By shielding colleges but targeting students, the House Appropriations Committee shows that it intends to reduce the deficit by taking money away from those Americans who can’t do much to stop them. But it will leave vocal interest groups to continue with business as usual. Their plan may add up to savings on paper, but in the long run, the cost of higher education—and likewise, federal financial aid—will only continue to rise without meaningful change to colleges.

Julie Margetta Morgan is a Policy Analyst with the Postsecondary Education Program at the Center for American Progress.

See also:

• House Budget Bill Guts Worker Protections by David Madland and Karla Walter
• House Republicans Eliminate Funding for Job Training (Again!) by Stephen Steigleder
• House Majority Appropriations Bill Attacks the Other 99 Percent by David Madland
• House Bill Costs More Than It Saves by Cutting Health Care by Topher Spiro