by Charles Dervarics
September 6, 2007

Students walk to and from classes on the campus of Arizona State University in Temple, Ariz. A new Arizona law requires public universities to deny cheaper in-state tuition rates and other state-funded financial aid to illegal immigrants.

With lenders and low-income students jockeying for position, Congress returns from summer recess this month with ambitious plans "but little time" to enact some of the most far-reaching student aid policy changes in a generation.

Topping the agenda is a 2008 budget bill that would take billions in subsidies to student loan providers and re-direct the money as aid to needy students. The White House has threatened to veto one version of this all-encompassing budget bill, while lawmakers in both chambers still must reconcile competing House and Senate proposals.

Elsewhere, long-time Capitol Hill watchers also predict protracted discussions on a 2008 education funding bill for hundreds of U.S. Education Department programs, while several groups want action on legislation to help immigrant children better afford college.

Add in the prospect of another bitter debate over the Iraq war, and the congressional plate is clearly full. "With the Iraq debate, there's not a whole lot of time," says Barmak Nassirian, the associate executive director of the American Association of Collegiate Registrars and Admissions Officers. Here is a brief outlook at some of the key higher education topics up for discussion:

Pell Grants: With proceeds from lender cuts, the Senate reconciliation bill would increase the top grant to $5,400 by 2011. The House bill is close behind at $5,200. Regardless of the outcome of that discussion, Congress must set the maximum grant for 2008. A House education spending bill recommends a top grant of $4,700 next year, while the Senate is recommending at least $4,600.

Interest rate cuts: The House has already passed a budget bill that would cut interest rates in half on federally subsidized loans to needy students, but the Senate has yet to act. The bill would also raise lending limits so fewer students with additional financial need have to turn to costlier private loans. But House critics say budget savings should go to current students, not to graduates paying back their loans after they leave school.

Such criticism doesn't sit well with student groups, however. "Students and borrowers don't just need support as freshmen and sophomores. They need support on the back end, too," Rebecca Thompson, the legislative director for the United States Student Association, says. Student loan debt affects career choices and plans for graduate school, among other issues, she says.

Loan repayment: Both the House and Senate reconciliation bills would limit a student's loan payments based on his or her discretionary income. Along with rate cuts, this provision is a priority for students. "It's making sure that they have protections all along the way," Thompson says.
While lawmakers must resolve some differences between the two provisions, support for the concept is strong. "Lawmakers are responding to the grave concerns of graduating students that repayment is affecting every choice they make," Nassirian says.

TRIO programs: Advocates of the Upward Bound program have fought hard all year against a controversial Education Department plan that requires grantees to recruit twice the number of students they can serve and then use some as a control group that receives no services. The House budget bill would halt the evaluation, and it also would fund additional Upward Bound grantees that have cited unfair treatment in a recent competition.

Many HBCUs are among the dozens of colleges and universities that would receive this additional funding, says the Council for Opportunity in Education, which represents Upward Bound grantees. The Senate has approved similar language on the evaluation and the additional grantees as part of a different bill.

Immigration / DREAM Act: It's not part of budget reconciliation or the 2008 education spending bills, but many groups are pushing for action to grant in-state tuition benefits to youth who came to the U.S. illegally while children. While Congress could not muster enough support this year for a comprehensive immigration bill, the tuition provision - known as the DREAM Act - has strong support, says Josh Bernstein, federal policy director at the National Immigrant Law Center.

"If anything, there's been an uptick in support," he says of the bill, which also would give these young adults a path toward citizenship. "It's not really about immigration. It's about our policy toward the children of immigrants," he tells Diverse. Organizations that oppose amnesty for illegal immigrants continue to oppose the plan.

With legislative time running short, Bernstein says sponsors likely will try to attach it to another bill moving through the Senate. Democratic leaders say they will try to add it to a defense authorization bill up for consideration in September, he says. "We're still hopeful," Bernstein adds.