Over the past month Congress has taken a series of steps that would impact federal funding for higher education.

On February 19 the U.S. House passed a seven-month long continuing resolution (H.R. 1) to fund federal programs for the remainder of FY2011. H.R. 1 reduced spending by almost $60 billion compared to FY10 spending levels.  Among the reductions included in H.R. 1 are several that would reduce funding for higher education.

• Reduces discretionary-funded maximum awards for the Pell Grant from $4,860 to $4,105.  When the mandatory funds ($690) are considered the 2011-12 maximum Pell Grant award would be $4,705. This is a 15% decrease from 2010-11;
• Makes proportionate reductions to awards below the maximum;
• Reduces Pell eligibility for some of the highest eligible Expected Family Contribution groups;
• Prohibits the U.S. Department of Education from using FY11 appropriations to implement, administer, or enforce gainful employment regulations;
• Provides no funding for the Federal Supplemental Educational Opportunity Grant (FSEOG) and the Leveraging Educational Assistance Partnership (LEAP). Both programs provide financial grants to students who qualify for financial aid; and
• Reduces President Obama’s proposed FY11 budget request by $100 billion.

An unintended consequence of the reduction to the Pell Grant included in H.R. 1 is the potential for the bill to trigger a provision in last year’s student-loan-overhaul law that conditions additional support for the Pell on Congress’ maintaining a “base” maximum award of $4,860. Under the overhaul, if lawmakers reduced the base below $4,860 the Pell Grant would become ineligile for mandatory “add ons” to the maximum starting in 2014.

According to an analysis by the Center on Budget and Policy Priorities, reducing the base by $845 to $4,105 as H.R. 1 proposes would result in the loss of $870 in mandatory money in 2014. Taken together, those reductions would cut the maximum award from the current $5,550 to $4,025.

The Senate has indicated that the reductions in H.R. 1 are too deep and are expected to release their version of a spending bill this week. It is expected that the Senate version will include nearly $25  billion in reductions, most of which were proposed by the Obama administration’s FY12 budget request. 

Despite all of this Congress has only five days to agree on a FY11 spending bill before the current continuing resolution bill expires on March 4 (this Friday). 

In a move that could temporarily prevent a government shutdown, if no agreement is reached by March 4, the House Republicans have proposed a short-term extension of federal funding that would continue to fund most federal programs at current levels for an additional two weeks (until March 18). In addition the extension would trim $4 billion from the budget. 

The reductions in the short-term Republican funding bill include earmarks that Congress had already agreed not to continue and programs that the President targeted for elimination in his FY12 budget, including LEAP. 

Senate Democrats have signaled some acceptance to the short-term proposal to allow more time to negotiate out a FY10 bill.