Congress Would Raise NIH Spending and Maintain Maximum Pell Grant, but at a Cost

December 15, 2011

[Updated: 12/16, 6:37 a.m.]

Congressional leaders reached agreement late Thursday on a spending bill for the remainder of the current fiscal year that would increase funds for the National Institutes of Health by 1 percent, or $300-million, and maintain the maximum Pell Grant at $5,550, but only by tightening eligibility for the grants.

The bill, HR 3671, introduced by Republicans in the House of Representatives, would also allow the NIH to go ahead with plans to create a new center to help pharmaceutical companies make drugs from universities' research discoveries, despite protests from scientists, lawmakers, and some officials at the agency.

Apart from the Pell Grant, most student-aid programs—including Supplemental Educational Opportunity Grants and Federal Work-Study—would receive flat financing, as would the Gear Up college-preparation program. The TRIO college-prep programs would get a $15-million increase.

Several major science agencies, including the National Science Foundation, were financed in a spending bill that cleared Congress in November. Among the remaining agencies, the Department of Energy's Office of Science would get $4.9-billion, a 1-percent increase; the Environmental Protection Agency's science and technology division would get $795-million, $18-million less than last year; and the Department of Homeland Security's science and technology directorate would receive $688-million, a $140-million cut.

All of those spending levels could shrink, however, under a pair of across-the-board cuts, or rescissions, proposed by the Republicans. Under the spending bill, programs operated by the Department of Education would be cut by 0.189 percent. A separate bill would pay for disaster aid with a 1.83 percent cut in all agencies, except for defense, military construction, and veterans affairs.

The spending bill, known as an "omnibus" because of its breadth, would wrap together the nine remaining spending bills for 2012, providing funds for dozens of government agencies. Much of the government has been operating at last year's levels under a series of short-term spending resolutions since October 1, when the 2012 fiscal year started.

The latest continuing resolution expires on Friday, and if lawmakers do not pass the spending bill or another stopgap resolution by then, much of the federal government could shut down. But House and Senate negotiators reached tentative agreement on the omnibus measure Thursday evening, and votes are expected in both chambers on Friday, in time to avert a shutdown.

Paying for Pell

To pay for the Pell Grant program, which has doubled in size in the past three years, the bill would tighten eligibility for the grants and temporarily end the interest subsidy on undergraduate student loans during the six-month grace period after a student graduates.

Under the bill, students would be limited to six years of Pell Grants, rather than the current nine. (It's unclear if the roughly 62,000 students who have already received at least six years of the grants would remain eligible for additional aid.) In addition, students who lack high-school diplomas or GED's would no longer be allowed to qualify for the grants by taking an "ability to benefit" test.

The bill would also reduce the number of students who automatically qualify for the maximum Pell Grant, by lowering the income cap for receiving an "automatic zero" expected family contribution, from $30,000 to $23,000.

Still, the measure would not cut nearly as deeply as an earlier House Republican bill that would have lowered the income cap to $15,000 and sharply reduced the amount of income that working students could exclude when applying for student aid. That bill—HR 3070, which was never voted on—would have also ended grants to students attending college less than half time and would have counted means-tested benefits, like food stamps, refundable tax credits, and untaxed Social Security benefits, against applicants for aid.

Those changes would have had a severe impact on community colleges, where many students work and are enrolled less than half time. Nonetheless, the final bill would still disqualify thousands of students and reduce awards for thousands more.

The Senate's version of the bill, S 1599, which cleared that chamber's education committee in September, would have eliminated the grace-period interest subsidy, but would have made no changes in the eligibility criteria for the grants.

Paul Basken contributed to this article.