Student-Aid-Funding Measure Clears Next Hurdle

Legislation to provide fiscal-2005 funding for federal student-aid programs has cleared another hurdle. The U.S. House Committee on Appropriations has approved funding for the Departments of Labor, Health and Human Services and Education.

The appropriations bill contains the following student-aid provisions:

• The maximum Pell grant would remain at its current level of $4,050, although total funding for the program would increase by more than $823 million over the current level.
• Funding for the Federal Work-Study Program and LEAP would remain at current levels.
• Federal Supplemental Educational Opportunity Grants would receive a $24-million increase.
• The federal capital contributions to support Federal Perkins loans would be eliminated.
• Federal TRIO programs would see a $10-million increase, and GEAR UP would receive a $20-million increase in funding.

On a voice vote, the panel also adopted an amendment offered by Rep. Randy Cunningham, R-Calif., that would countermand guidance offered by the U.S. Department of Education regarding the definition of a "single holder" for the purposes of loan consolidation. The amendment would prohibit the Secretary of Education from using any appropriations to enforce the text of an April 29, 2004, Dear Colleague letter. The letter directs that borrowers with both Federal Family Education Loan Program (FFELP) loans held by a single loan holder and non-FFELP loans — such as Federal Perkins loans or direct loans — who seek to consolidate their education loans in the FFELP must request a Federal Consolidation loan from their current FFELP-loan holder and must consolidate at least one FFELP loan.

The appropriations measure next moves to the full House of Representatives.