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House Education Committee Advances Bipartisan Short-Term Pell Grant Legislation

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

The House Education and the Workforce Committee on Tuesday advanced legislation that would enable the use of short-term Pell Grants by a bipartisan vote of 37-8.

During the committee hearing, members approved a substitute amendment that would make a number of minor technical changes, concerning data collection and definitions, and revise an offset provision. An offset is when a bill makes adjustments to spending priorities by increasing spending for certain activities and offsetting the increase by decreasing or striking funding for other activities.

The bill maintains a concerning provision intended to help cover the cost of the legislation that would prohibit certain private institutions that are subject to an excise tax on investment income, also known as the endowment tax, from awarding federal student loans to eligible students. These schools would also be unable to award Federal Direct PLUS loans to a parent of a Pell Grant recipient. The substitute amendment approved during Tuesday’s hearing also included a new offset provision specifying that schools subject to the endowment tax may only receive Federal Supplemental Educational Opportunity Grants (FSEOG) if they ensure that Pell Grant recipients receive a total amount of grants and scholarships that is not less than the student’s cost of attendance.

Democrats offered, and withdrew, a pair of amendments seeking to exclude for-profit institutions and online programs from being eligible for the program.

The legislation to allow for short-term Pell Grants for academic programs that operate for at least eight and no more than 15 weeks, often referred to as “Workforce Pell Grants,” garnered praise from members on both sides of the aisle, but the committee indicated that it would continue to revise the bill text as the process moves forward.

Rep. Virginia Foxx (R-N.C.), chairwoman of the committee, thanked the committee for working in a bipartisan fashion, which she said would help to “broaden the precarious education tightrope to a true pipeline in which many paths can lead to a rewarding career.”

Ranking member Bobby Scott (D-Va.) also praised the committee’s work on negotiating the bipartisan legislation over the course of the year.

“We have been trying to expand the use of Pell Grants for years, and I am excited that we finally reached a bipartisan agreement with solid quality assurance measures to ensure that taxpayer dollars are used on high-quality programs,” Scott said. “Too often, we hear claims from employers about the difficulties of filling in-demand jobs. But looking at our rural and urban communities reveals that talent is everywhere, but opportunity is not.”

During the markup, both Democrats and Republicans were optimistic about the prospect of short-term Pell Grants and wanted to see the process continue, but members on both sides did express some concern over the legislation’s offset language. Members said that by removing the availability of federal student loans at certain institutions would pressure students to take out private loans and incur higher borrowing costs.

Some Democrats, who ultimately voted against the bill, said they were supportive of the effort to expand short-term Pell Grants, but hoped their concern with the legislation, related to the inclusion of for-profit and online programs and the offset provision, would be addressed in the Senate’s version.

Scott pledged that the committee, going forward, would look at how the bill’s offset language could be refined and would also work to ensure that the necessary guardrails are in place to assure program quality.

“The comments that have been made are well taken and we are going to be looking for ways to improve the pay-for,” Scott said. “I would hope that we could go forward [with the bill] as it is, as we seek other ways to pay for the legislation.”

Prior to the markup, the American Council on Education (ACE) led a group of higher education based associations, including NASFAA, in sending a letter to the committee urging members to revise the offset provision in the bill. The letter warned that “offsets contained in the bill represent an unprecedented and harmful shift in federal financial aid.”

The letter specifically expressed concern that the bill would create a “harmful precedent” that could push students, at certain institutions, to take out private loans and incur higher borrowing costs.

The measure now heads to the House floor, but so far the Senate has not yet introduced a companion version of the bill, but has put forward its own proposal, the Jumpstarting Our Businesses by Supporting Students (JOBS) Act, that includes a bipartisan short-term Pell Grant provision.

 

Publication Date: 12/13/2023


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