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Not for long.

Bill Clears Way for Government to Cut Back College Loans
By GREG WINTER and DIANA JEAN SCHEMO

The federal government will be able to require millions of college students to shoulder more of the cost of their education under the new spending bill approved yesterday by the House and Senate.

The government moved to change its formula for college aid last year, but was blocked by Congress. Now, however, no such language appears in the appropriations bill lawmakers are considering, clearing the way for the government to scale back college grants for hundreds of thousands of low-income students.

Nearly 100,000 more students may lose their federal grants entirely, as Congress considers legislation that could place more of the financial burden for college on students and their families.

The cutback stems from a revision to the formula governing virtually all of the nation’s financial aid. Last year, the Department of Education changed the formula on its own, angering members of Congress who contended that it was a backdoor way of cutting education spending without facing the public. The department retorted that it was merely following the law.

In response, Congress passed legislation in the fall of 2003 to suspend the new formula for at least a year. The Senate put forward the same measure this year, and many members of the House said they also expected the new formula would wait at least until Congress updates the Higher Education Act, which will probably take the better part of the coming year.

But keeping the old formula in place for another year would add an extra $300 million in grants for college students to a program that is already running at a shortfall, the Office of Management and Budget said. So, the bill approved yesterday, brokered by Congressional leaders in a conference committee, eliminates a provision that would have barred the Education Department from changing the eligibility formula. A Senate staff member who spoke on the condition of anonymity said that the White House insisted the provision be dropped, citing the shortfall, and House Republicans were adamant in their agreement to do so.

“They are throwing students out of the opportunity to seek a college education,” said Senator Jon S. Corzine, the New Jersey Democrat who wrote the amendment to stop the changes last year, and introduced a similar provision this year that did not survive the conference committee. “It is now clear to me that this was a backdoor attempt to cut funding from the Pell grant program.”

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