Congress to give more, demand more: a Pell Grant increase is in the HEA bill, but so are provisions for colleges to explain large endowments and tuition increases

Diverse Issues in Higher Education, March 6, 2008 by Charles Dervarics

The long-delayed renewal of the Higher Education Act is back on the fast track thanks to recent action in the House of Representatives. But now a team of House and Senate negotiators must reach a final agreement on dozens of key provisions with potential gains for low-income students and minority-serving institutions.

Similar to the Senate HEA bill approved last year, the House measure approved last month recommends a significant increase in Pell Grants over the next decade. It also has at least four major provisions of interest to MSIs, including a new $250 million program to address the digital divide at historically Black colleges and universities, Hispanic-serving institutions and tribal colleges.

"We've been waiting 10 years" for action on HEA renewal, says Edith Bartley, government affairs director at the United Negro College Fund. On several high-priority issues for MSIs, she adds, "There is momentum now."

The long-discussed plan to help HBCUs, HSIs and tribal colleges address the digital divide is a key case in point. Though it has languished in recent years, the plan has now cleared the House and Senate but in somewhat different forms. Both chambers would allocate $250 million, though the Senate would house the program at the U.S. Department of Education while the House would place it at the Department of Commerce.

"It's a better fit at Commerce" Bartley says. House and Senate negotiators will have to decide the final spot for the program, but the recent action shows the concept has strong bipartisan approval.

Two other key provisions for HBCUs are in the House-passed bill, the College Opportunity and Affordability Act, but not the Senate measure. One House provision would increase the lending authority of the HBCU Capital Financing Program from $375 million to $1.1 billion. The program offers low-interest loans for college improvements, and the ongoing credit crunch has made the program even more important to HBCUs, Bartley says.

"These institutions often don't have access to large capital or large endowments," she adds.

The second provision would increase from $300 million to $500 million the authorization level for the federal HBCU program and increase from $100 million to $125 million the authorization for HBCU graduate programs. Authorizations set annual funding ceilings for programs, with actual funding set through the appropriations process.

These plans are important because President Bush has proposed a net decline for HBCUs in his 2009 budget, according to Bartley.

For HSIs, one key provision in the House bill would provide $125 million for graduate programs at these institutions. This program is a priority of Rep. Ruben Hinojosa, D-Texas, chairman of the House higher education subcommittee.

"We need smart strategies that will boost our educated work force and secure our competitive edge for years to come," Hinojosa says.

House and Senate members also must reconcile other legislative provisions affecting colleges and universities and low-income students, including:

* Financial aid: The just-approved House bill would raise the maximum Pell Grant to $9,000 by 2009. The Senate-approved measure would set the maximum award at $6,300. Both bills would simplify the financial aid process by creating an EZ FAFSA, a two-page aid application.

Pell is a particularly high priority for student groups, who also want Congress to approve a year-round Pell Grant to help students who may study in the summer or other off-peak times. "It would have helped me," says Gabriel Pendas, president of the United States Student Association, who says he frequently enrolled in summer courses. "Our major priority is increasing the maximum award and malting it year round."

* Endowments: Colleges and universities would have to report more information about their endowments under the House HEA bill. While they would not have to spend a set amount of their endowments each year, they would have to tell the government annually how much they spend to reduce student tuition and fees.

"It would provide Congress with much needed information, the same information that goes to [university] trustees, so it is not in any way a significant burden," says Rep. Peter Welch, D-Vt., author of the plan. Welch originally wanted a requirement for colleges to spend at least 5 percent of their endowments annually, but he withdrew that plan after strong objections in the higher education community.

* Cost control and monitoring: The House stopped short of implementing cost controls on colleges, but those with large annual percentage increases would have to explain their reasons. The bill would require them to create task forces to examine reasons for the price hikes; schools also would have to send reports to the Department of Education about reasons behind the increases. The provision is "a major step to curb tuition increases," Pendas says.

Members of Congress from both parties are "frustrated" over skyrocketing tuition costs, says Rep. Ric Keller, R-Fla., the top Republican on the House higher education subcommittee. But lawmakers "are hesitant to implement any sort of cost control or micromanaging of these universities," he says. The bill's provisions offer a middle ground, with greater monitoring of the issue.