House Approves 2004 Spending Bill That Includes Student-Aid Funding

The U.S. House of Representatives has approved a 2004 spending bill that includes funding for major federal student-aid programs. The measure, which consolidates seven separate federal spending bills, passed the House on a vote of 242 to 176. Among the major student-aid provisions are the following:

• The maximum Pell-grant award will remain at $4,050 for the 2004-2005 award year. This level is the same as for the current award year.
• The measure provides just under $14.1 billion for student-financial-assistance programs, slightly less than the original appropriations levels approved by the House and Senate.
• The legislation delays scheduled changes in the federal need-analysis formula. Critics had argued that the annual updates to the formula regarding allowances for state and other taxes would have cost families billions of dollars in financial aid.
• The measure requires the Advisory Committee on Student Financial Assistance to study simplification of need-analysis methodology, including possibilities for streamlining federal financial-aid forms, and report back within one year.

House and Senate conferees who fashioned the compromise spending measure also expressed concern about "single-holder" provisions that require borrowers whose education loans are held by one entity to turn to that entity for Federal Consolidation loans. The conferees are concerned that, because of this requirement, some borrowers may not be permitted to consolidate their loans with any lender they choose. They urge quick action during the reauthorization of the Higher Education Act "to ensure borrowers have the best options available to them in order to manage their student- loan obligations."

The Senate was unable to pass the bill by voice vote because of objections to a variety of provisions. Because of the need for a roll-call vote, the Senate will not act on the spending measure until it reconvenes on Jan. 20, 2004.