First Senate Budget in Four Years Fully Funds Pell Grants, Makes Stafford Loan Interest Rate Permanent
The Senate passed its first formal budget proposal in four years early Saturday, a plan which would fully fund Pell Grants, among other provisions of interest to higher education.
The non-binding blueprint for the FY 2014 budget was approved 50–49. The bill now goes to the House, where it is expected to be struck down.
For its part, the Democratic-led Senate recently killed the budget proposal passed by the Republican-controlled House.
The Senate plan, authored by Budget Committee Chair Patty Murray (D-WA), would raise tax revenues by about $975 billion and cut spending by about the same amount over the next 10 years. It also calls for replacing the sequester cuts with a mix of different spending cuts and tax increases, and adds $100 billion in new spending on infrastructure and job training.
ACE sent a letter on behalf of 10 other higher education associations to the Senate Friday in support of its proposal, which offers several advantages for programs of interest to higher education. In particular, the Senate budget would fully fund Pell Grants and eliminate future shortfalls from the program, make the subsidized Stafford Loan interest rate permanent, and provide increased funding levels for the other aid programs as well as scientific research and institutional support.
The House budget proposal, which was approved Thursday by a vote of 221-207, would reduce funding for the Pell Grant Program by $86 billion over the next 10 years, and severely limit eligibility.
It also would eliminate the federal student loan in-school interest exemption, curtail income-based repayment options and slash research funding, which already has been reduced by sequestration.
Along with 13 other higher education associations, ACE wrote to House members Wednesday, outlining objections to their plan.
Now that both chambers have an approved budget, the theoretical next step is for the House and Senate to hold a conference to resolve the differences between their budget resolutions. Given the magnitude of these differences, it is unlikely that they will find common ground.
However, passage of competing budget resolutions will at least allow both chambers to begin working on actual spending bills for the fiscal year that begins Oct. 1.
President Obama is expected to send his FY 2014 budget proposal to Congress on Monday, April 8.