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Senate votes to expand student aid

Published Oct. 10, 2005

The Senate voted Friday to expand student aid programs to make bigger grants and loans available to college and trade school students and to relax income eligibility requirements.

By a 93-1 vote, the Senate passed a renewal of the Higher Education Act that is designed to make more middle-income families eligible for help in paying college tuition, which has been increasing much faster than the overall inflation rate. Sen. Jesse Helms, R-N.C., cast the lone no vote.

The bill also would crack down on student loan defaults, refusing loans to students at institutions with default rates of 25 percent or more.

Democrats dropped plans to transform Pell grants, the major aid program for low-income students, into an entitlement program that would automatically give every eligible student the full grant allowed by law. Now, Pell grants are subject to appropriations each year, and Congress has never provided enough money for all eligible students to receive the full grant allowed.

The White House had threatened a veto if Congress made Pell grants an entitlement. The House version of the bill, which has not yet reached the floor, still contains such a provision.

The administration has criticized both versions for giving too much help to middle-income students. Bush's higher education proposals called for limiting federal help to poor families.

The Senate bill would authorize $17.4-billion in fiscal 1993, the bulk of which would go to financial aid programs. Congress appropriated $11.7-billion for student aid in fiscal 1992 and $828-million for all other higher education programs. The federal money leverages additional state and private dollars to provide a total of $21.5-billion to 6-million students to cover school costs.

The legislation would increase the maximum Pell grant to $3,600 in the 1993-94 academic year. Although current law authorizes a maximum grant of $3,100 per student, that amount has never been funded. The most a student now may receive is $2,400.

The bill also would boost the average income ceilings for a family to qualify for a Pell grant. Now, the average family of four may earn no more than about $30,000 a year for its child to receive a grant. The bill would raise that ceiling to $40,000 a year.

The bill also would ease standards determining how much financial aid a student may qualify for by excluding the value of a family's home or farm from the calculation if they have income of $50,000 or less.