Democrats Trim Student Aid Reform Package

Congressional Democrats on Thursday trimmed their original student loan plans, reduced spending for community colleges, and eliminated early childhood money from a broad rewrite of a college aid bill piggybacked on to fast-track health care legislation.

The student loan measure would be the biggest change in college assistance programs since Congress created them in the 1960s, ending a private-lender program by having the government originate all loans to needy students.

But facing savings smaller than anticipated from the switch and a shortfall in Pell Grant money for low-income students, Democrats are proposing no increases in Pell Grants over the next two years and a modest increase over the five years that follow.

"We're hoping by then our economy will be better, we will be out of the doldrums and we'll be able to address the situation at that time," said Sen. Tom Harkin, D-Iowa, the chairman of the Senate Health, Education, Labor and Pensions Committee. "What we're doing here is taking care of the next few years."

The maximum Pell Grant, which a House-passed bill last year would have raised to $6,900 over 10 years, will now only increase to $5,900. The current maximum grant for the coming school year is $5,500.

"This isn't even maintaining a fiction of maintaining the status quo," said Mark Kantrowitz, who runs the Web site finaid.org. "This is going to lose ground."

Consolidating the college aid package with health care could make it easier to pass the college aid plan in the Senate, where it seemed unable to muster 60 votes to overcome procedural hurdles. And it would give House Democrats a popular incentive to sweeten a vote for health care changes.

The House plans to take up the legislation this weekend. The Senate would follow next week.

The new bill would spend $13.6 billion to fill a financial hole in the Pell Grant program, but would still leave a $5.5 billion shortfall. Officials say a poor jobs market has driven potential workers to colleges and technical schools, putting a strain on the program.

More Coverage of the Health Care Reform Debate:

The Hunt for Health Care Votes: Democrats to Watch
Obama: Health Care Debate is About Country's Character
Obama Deploys Personal Presidential Touch
Dem Health Care Bill Pegged at $940B Over 10 Years
Washington Unplugged: Nancy Cordes on the Final Countdown
Dueling News Conferences
Steny Hoyer: Health Care Vote Won't Cost Us in Nov.
Stupak Wants Separate Abortion Bill or He Won't Support Health Care Bill
Glenn Beck, Steve King: Health Care Bill Vote an Affront to God
CBSNews.com Special Report: Health Care

Details on the Bill:

What's in Health Care Bill? Take a Dose
Health Care Special Deals: What's Left In?
Read the Text (PDF): Complete Senate Bill | Reconciliation Measure