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COHEAO Alert! Senate Passes LHHS Appropriations Bill

After almost four days of debate, late Tuesday night the Senate passed the FY 2008 Labor, Health and Human Services, and Education Appropriations Act (H.R.3043)—by a vote of 75 to19. The measure provides $606 billion in appropriations for the departments of Labor, Health and Human Services and Education and for some independent agencies such as the Social Security Administration. Of the total, $149.9 billion is proposed discretionary spending, which is close to $10 billion more than proposed in the President’s budget request and $5.4 billion over FY 2007. It is expected that this bill will immediately move to conference between the Senate and House, where Members will negotiate the $1.9 billion difference between the Senate and House funding levels.

One defeated amendment is of particular interest to the Perkins Loan Program and COHEAO. Sen. Wayne Allard (R-CO) introduced an amendment to reduce the total amount appropriated by 10 percent to any program rated “ineffective” by the Office of Management and Budget through the “Program Assessment Rating Tool” (PART). Listed under the “ineffective” programs is the Federal Perkins Loan Program. This amendment failed by a vote of 68-26. COHEAO has strongly criticized the PART analysis since it first surfaced in 2002, noting that it unfairly rates the Perkins Loan program based on a series of administrative issues, not on whether the program is effective in serving students and helping provide access to higher education.

Report language accompanying the bill includes language on the Federal Perkins Loan Program. The language is below:

Federal Perkins Loans

The Federal Perkins loan program supports student loan revolving funds built up with capital contributions to nearly 1,900 participating institutions. Institutions use these revolving funds, which also include Federal capital contributions [FCC], institutional contributions equal to one-third of the FCC, and student repayments, to provide low-interest (5 percent) loans that help financially needy students pay the costs of postsecondary education.

The Committee recommends $65,471,000 for loan cancellations, the same amount as the comparable funding level for fiscal year 2007. The budget request did not include any funds for this purpose. These funds reimburse institutional revolving funds on behalf of borrowers whose loans are cancelled in exchange for statutorily specified types of public or military service, such as teaching in a qualified low-income school, working in a Head Start Program, serving in the Peace Corps or VISTA, or nurses and medical technicians providing health care services.

The Committee bill does not include any funds for Federal Perkins loans capital contributions. The comparable fiscal year 2007 funding level did not include such funds and the budget request does not provide any funds for this purpose.