House Panel Approves FY 2013 Spending Bill

The House Labor, Health, Human Services, Education and Related Agencies Subcomittee (Labor-H) passed their draft fiscal year (FY) 2013 spending bill yesterday by a vote of eight to six. The bill, which would set funding levels for student aid programs in award year 2013-14, includes $150 billion in discretionary funding, which marks a decrease of $6.3 billion below last year's level.

While the bill contained significant overall cuts, funding for the major student aid programs was generally preserved. Under the bill approved by the subcommittee, the Pell Grant maximum for the 2013-14 award year would be at its scheduled maximum of $5,635.  This amount comes from fully funding the authorized discretionary maximum of $4,860 plus additional mandatory funding, which received a mandated increase based on the Consumer Price Index (CPI). Maintaining the maximum Pell Grant will be more challenging in the FY 2014 budget when temporary mandatory funding expires and the program will face a nearly 8 billion shortfall.

The Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) programs received level funding. 

In addition, the bill contained several directives related to the prohibition of the use of funds for the implementation, administration, and/or enforcement of gainful employment, credit hour, and state authorization regulations.  These prohibitions were included in a similar draft bill last year but were ultimately not accepted into the final funding bill.

The House bill's student aid funding provisions generally reflect the Senate Labor-H bill, which also called for fully funding the Pell Grant and level funding for FSEOG and FWS.  However, the Senate bill did contain several key proposals that were not included in the House bill, including a provision to amend the cost of attendance (COA) definition in the need analysis section of the law, as regards to distance education students. The Pell Grant COA for students who receive all of their instruction by telecommunications technology would be limited to tuition, fees, books, and supplies.  The restriction would not apply to other Title IV Programs. In addition, the Senate bill also contained a provision to restore the ability--to-benefit (ATB) option for students who are enrolled in adult and postsecondary education for career development--the House bill did not contain this language.

The House bill will now move to the full Committee for a vote, where it will likely pass.  After that occurs, the appropriations process will be a standstill as the final FY 2013 budget will likely not be resolved until after the election.