I

104TH CONGRESS

2D SESSION H. R. 3919

To provide financial aid grants for college and technical school education.

IN THE HOUSE OF REPRESENTATIVES

JULY 30, 1996

Mr. OBEY (for himself, Mr. CLAY, Mr. MILLER of California, Mr. YATES, Mr.

BROWN of California, Mr. FROST, Mr. LIPINSKI, Ms. DELAURO, and Mr.

HINCHEY) introduced the following bill; which was referred to the Committee on Economic and Educational Opportunities

A BILL

To provide financial aid grants for college and technical

school education.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘American Opportunity

5 Grant Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:

8 (1) An educated citizenry is fundamental both

9 for a democratic society and for a productive econ10 omy.
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1 (2) In today’s world a high school education is

2 only the foundation of the lifelong learning process

3 which will permit individuals and nations to prosper

4 in the highly changing international economy of the

5 21st century. A college education remains an excel6 lent investment both for students and for America.

7 (3) The right of every American to a free, pub8 licly financed education through high school and the

9 responsibility of State and local governments to pro10 vide this education is recognized by the basic laws

11 of every State and Commonwealth within the United

12 States. Approximately, 90 percent of all Americans

13 receive their basic education through the locally gov14 erned and managed public schools.

15 (4) Postsecondary education, in contrast, is de16 livered through a diverse system of public and pri17 vate institutions. Students, families, the Federal

18 Government, States, and the private sector provide

19 the funds for this education through a system which

20 is neither rational nor adequate. A new partnership

21 is necessary which redefines and makes more ration22 al the respective roles of students, families, govern23 ment, nonprofit, and the private sector in ensuring

24 financial access to the high quality educational op-
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1 portunities which students are academically prepared

2 to undertake.

3 (5) At the same time that the need for post4 secondary education is becoming universal, the cost

5 of this education has increased, causing financial

6 strain for all but the most affluent American fami7 lies to afford.

8 (6) The interstate mobility of the modern

9 workforce and the integrated nature of the American

10 economy make it appropriate for the national gov11 ernment to expand its contribution to the financing

12 of postsecondary education so that it is a more equal

13 partner with State governments and families in fi14 nancing postsecondary education.

15 (7) It is therefore important that adequate fi16 nancial resources are available to assure that every

17 high school graduate has access to the postsecondary

18 training which his or her efforts have qualified them

19 for academically.

20 (8) As the Federal contribution increases, how21 ever, it will be necessary to ensure that future in22 creases in the cost of attendance for students, in23 cluding tuition charges, is constrained so that Fed24 eral assistance is directed to the students rather

25 than to the institutions or to State governments.
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1 The principle must be that additional Federal sup2 port is intended to supplement public resources for

3 education not to substitute Federal dollars for exist4 ing State expenditures.

5 (9) It is appropriate that the Federal Govern6 ment in exchange for the financial assistance pro7 vided, require that students meet appropriate aca8 demic standards both for initial eligibility and for

9 continuing support.

10 SEC. 3. AMERICAN OPPORTUNITY GRANTS.

11 (a) DESIGNATION OF PROGRAM; ELIGIBLE INSTITU12 TIONS.—Section 401(a) of the Higher Education Act of

13 1965 (20 U.S.C. 1070a(a)) is amended by striking para14 graph (3) and inserting the following:

15 ‘‘(3) Basic grants made under this subpart shall be

16 known as ‘American Opportunity Grants’.

17 ‘‘(4) Notwithstanding section 481, for purposes of

18 this section the terms ‘eligible institution’ and ‘institution

19 of higher education’ have the meaning given the term ‘in20 stitution of higher education’ by section 1201 of this

21 Act.’’.

22 (b) REVISION OF GRANT PROGRAM.—Section 401(b)

23 of the Higher Education Act of 1965 (20 U.S.C.

24 1070a(b)) is amended by striking paragraphs (2) through

25 (5) and inserting the following:
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1 ‘‘(2) DETERMINATION OF AMOUNT OF

2 GRANT.—The amount of the basic grant for a stu3 dent eligible under this part for academic year

4 1998–1999 is determined on the basis of the ad5 justed income of the student’s family and is equal to

6 the sum of the basic award, the ‘B’ average merit

7 award, and the public service award as determined

8 under the following table:

If the adjusted income is— The basic award

is—

The ‘‘B’’ average

merit award is—

The public service

award is—

Less than $10,000 .............. $3,000 $1,000 $1,000

10,001 to 15,000 ................ 2,950 900 1,000

15,001 to 20,000 ................ 2,900 800 1,000

20,001 to 25,000 ................ 2,850 800 1,000

25,001 to 30,000 ................ 2,800 700 1,000

30,001 to 35,000 ................ 2,750 600 1,000

35,001 to 40,000 ................ 2,700 500 1,000

40,001 to 45,000 ................ 2,650 500 1,000

45,001 to 50,000 ................ 2,600 500 1,000

50,001 to 55,000 ................ 2,550 500 1,000

55,001 to 60,000 ................ 2,450 500 1,000

60,001 to 65,000 ................ 2,200 500 1,000

65,001 to 70,000 ................ 1,700 500 1,000

70,001 to 75,000 ................ 1,000 500 1,000

75,001 to 80,000 ................ 500 500 1,000

80,001 to 90,000 ................ 0 500 1,000

More than 90,000 ............... 0 0 0

9 ‘‘(3) LIMITATIONS ON CALCULATIONS.—

10 ‘‘(A) COST OF ATTENDANCE LIMITATIONS

11 ON CALCULATIONS.—Notwithstanding para12 graph (2)—

13 ‘‘(i) the basic award determined under

14 the table contained in such paragraph shall
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1 not exceed 50 percent of the cost of at2 tendance for the eligible student; and

3 ‘‘(ii) the ‘B’ average merit award de4 termined under such table shall not exceed

5 15 percent of such cost of attendance.

6 ‘‘(B) GRADE RECOGNITION.—A student is

7 eligible for a ‘B’ average merit award for any

8 academic year immediately following an aca9 demic year for which the student has main10 tained a grade average of ‘B’ or better (or the

11 equivalent of such a grade as determined in ac12 cordance with regulations prescribed by the

13 Secretary), except that no institution may grant

14 such a merit award to more than one-half of its

15 students for any academic year.

16 ‘‘(C) SERVICE RECOGNITION.—A student

17 is eligible for a public service award for any

18 academic year immediately following an aca19 demic year in which the student has performed

20 195 or more hours of qualifying public service

21 (as determined in accordance with regulations

22 prescribed by the Secretary).

23 ‘‘(D) DETERMINATION OF ADJUSTED IN24 COME.—For purposes of subparagraph (A), a
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1 family’s adjusted income is equal to the sum

2 of—

3 ‘‘(i) the family’s adjusted gross in4 come; and

5 ‘‘(ii) a contribution from assets deter6 mined by—

7 ‘‘(I) determining net worth in the

8 manner required by sections

9 475(d)(2), 476(c)(2), and 477(c)(2);

10 ‘‘(II) subtracting any portion of

11 such net worth that is attributable to

12 farm assets, a tax-deferred retirement

13 savings account or plan (as defined by

14 the Secretary by regulation); and

15 ‘‘(III) subtracting $50,000;

16 except that such contribution from assets

17 shall not be less than zero.

18 ‘‘(3) BASELINE EXPENDITURE AND REVENUE

19 LIMITATIONS.—

20 ‘‘(A) IN GENERAL.—In order to be an eli21 gible institution under the American Oppor22 tunity Grant program, the governing authority

23 of the institution of higher education shall cer24 tify to the Secretary that—

25 ‘‘(i) the institution has maintained—
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1 ‘‘(I) an average annual expendi2 ture for the applicable academic year

3 that is at least equal to the average

4 annual expenditure per full-time

5 equivalent student for the 3 preceding

6 academic years; or

7 ‘‘(II) an annual education and

8 general expenses expenditure for the

9 applicable academic year that is at

10 least equal to the average annual edu11 cation and general expenses expendi12 ture for the 3 preceding academic

13 years; and

14 ‘‘(ii) the tuition increase (if any) for

15 the applicable academic year does not ex16 ceed 120 percent the average annual tui17 tion increase for all similar institutions for

18 the 3 preceding academic years, as deter19 mined in accordance with regulations pre20 scribed by the Secretary.

21 ‘‘(B) REVIEW OF CERTIFICATION.—The

22 review of such certification by the Secretary

23 shall be limited to such criteria which the Sec24 retary believes necessary to assure that en-
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1 hanced Federal assistance has not been used to

2 supplant existing funding by the institution.

3 ‘‘(C) WAIVERS.—The Secretary may waive

4 the requirements of this paragraph if the review

5 conducted under subparagraph (B) dem6 onstrates that the failure to comply was caused

7 by extraordinary and compelling circumstances.

8 ‘‘(4) PART-TIME STUDY.—In any case where a

9 student attends an institution of higher education on

10 less than a full-time basis (excluding a student who

11 attends an institution of higher education on less

12 than a half-time basis) during any academic year,

13 the amount of the basic grant to which that student

14 is entitled shall be reduced in proportion to the de15 gree to which that student is not so attending on a

16 full-time basis, in accordance with a schedule of re17 ductions established by the Secretary for the pur18 poses of this division, computed in accordance with

19 this subpart. Such schedule of reductions shall be es20 tablished by regulation and published in the Federal

21 Register in accordance with section 482 of this Act.

22 (c) PERIOD OF ELIGIBILITY.—Section 401(c) of the

23 Higher Education Act of 1965 (20 U.S.C. 1070a(c)) is

24 amended to read as follows:

25 ‘‘(c) PERIOD OF ELIGIBILITY.—
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1 ‘‘(1) BACCALAUREATE DEGREE STUDENTS.—

2 An undergraduate student enrolled full-time in a

3 program leading to a baccalaureate degree shall be

4 entitled to 4 academic years of support, if the stu5 dent is certified prior to the beginning of each aca6 demic term as making satisfactory progress toward

7 such degree. The Secretary shall promulgate regula8 tions for providing an equivalent period of support

9 for less than full-time students.

10 ‘‘(2) NONBACCALAUREATE DEGREE STU11 DENTS.—An undergraduate student who is not en12 rolled full-time in a program leading to a bacca13 laureate degree shall be entitled to up to 2 terms of

14 support, each of which may not exceed 1 year in

15 length. The Secretary shall promulgate regulations

16 for providing an equivalent period of support for less

17 than full-time students.

18 ‘‘(3) SINGLE GRANT.—No student is entitled to

19 receive a basic grant concurrently from more than 1

20 institution for any academic year.

21 (d) EFFECTIVE DATES.—Except as provided in sec22 tion 4, the amendments made by this section shall be ef23 fective with respect to grants to students for academic

24 years beginning on or after July 1, 1998.
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1 SEC. 4. PRESERVATION OF PELL GRANTS FOR PROPRI2 ETARY SCHOOL STUDENTS.

3 (a) IN GENERAL.—Notwithstanding the amendments

4 made by section 3 of this Act, students attending propri5 etary institutions of higher education or postsecondary vo6 cational institutions (as such terms are defined in section

7 481 of the Higher Education Act of 1965 (20 U.S.C.

8 1088)) shall continue to be eligible to receive Pell grants

9 in accordance with section 401 of such Act as in effect

10 on the day before the date of enactment of this Act, except

11 that the maximum grant under subsection (b)(2)(A) of

12 such section 401 shall be $2,500.

13 (b) GAO EVALUATION.—Within 18 months after

14 such date of enactment, the Comptroller General shall

15 submit a report to the Economic and Educational Oppor16 tunities Committee of the House of Representatives and

17 the Labor and Human Resources Committee of the Senate

18 a report evaluating the financial aid needs of students at19 tending the institutions described in subsection (a), and

20 containing such alternatives and recommendations as the

21 Comptroller General considers appropriate to address

22 those financial aid needs.

23 SEC. 5. EVALUATION.

24 Section 491 of the Higher Education Act of 1965 (20

25 U.S.C. 1098) is amended by adding at the end the follow26 ing new subsection:
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1 ‘‘(m) AMERICAN OPPORTUNITY GRANT STUDY.—The

2 Advisory Committee shall conduct a study of the baseline

3 expenditure and revenue limitations contained in section

4 401(b)(3) of this Act and the need for any modifications

5 to such limitations. Such report shall include recommenda6 tions to restrain the annual rate of tuition increases and

7 increases in the cost of attendance. The Advisory Commit8 tee shall submit a report on the results of such study to

9 the Congress not later than December 31, 1998.’’.

10 SEC. 6. COMMISSION ON CORPORATE WELFARE.

11 (a) PURPOSE.—It is the purpose of this section to

12 establish a Commission on Corporate Welfare.

13 (b) ESTABLISHMENT.—There is hereby established

14 an independent agency in the executive branch a commis15 sion to be known as the Commission on Corporate Welfare

16 (hereafter in this section to be referred to as the ‘‘Commis17 sion’’).

18 (c) MEMBERSHIP.—The Commission shall be com19 posed of 7 members, 3 whom shall be appointed by the

20 President from the business community, one of whom shall

21 be appointed by the Speaker of the House of Representa22 tives, 1 of whom shall be appointed by the minority leader

23 of the House of Representatives, one of whom shall be ap24 pointed by the majority leader of the Senate, and 1 of

25 whom shall be appointed by the minority leader of the
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1 Senate. The members of the Commission shall be ap2 pointed not later than 30 days after enactment of this Act.

3 Members of the Commission shall be appointed for the life

4 of the Commission and any vacancy shall be filled in the

5 manner of the original appointment. The Commission

6 shall select a chairperson from among its members.

7 (d) MEETINGS.—The Commission shall meet at the

8 call of the chair, and 5 members shall constitute a

9 quorum, but a lesser number may hold hearings.

10 (e) DUTIES.—The Commission shall recommend

11 changes in existing law relating to Federal expenditures

12 and revenues that would reduce direct or indirect subsidies

13 to corporations that in total produce a net savings that

14 would fully offset the expenditures resulting from section

15 3 of this Act, as determined by the Congressional Budget

16 Office.

17 (f) REPORT AND RECOMMENDATIONS.—The Com18 mission shall submit a final report to the President and

19 the Congress on the Commission’s recommendations with20 in 6 months of the date of enactment of this Act.

21 (g) POWERS OF THE COMMISSION.—

22 (1) HEARINGS.—The Commission may hold

23 hearings, sit and act at such times and places, take

24 such testimony, and receive such evidence as the
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1 Commission considers advisable to carry out the

2 purposes of this part.

3 (2) INFORMATION FROM FEDERAL AGENCIES.—

4 The Commission may secure directly from any Fed5 eral department or agency such information as the

6 Commission considers necessary to carry out the

7 provisions of this section.

8 (h) AUTHORIZATION OF APPROPRIATIONS.—There

9 are hereby authorized to be appropriated $1,000,000 to

10 carry out this section for fiscal year 1997. Amounts avail11 able under this section are authorized to remain available

12 until expended.

13 (i) STAFF AND EXPENSES.—The Chairperson of the

14 Commission may without regard to the civil service laws

15 and regulations, appoint and terminate an executive direc16 tor and 6 staff members to enable the Commission to per17 form its duties. The employment of the executive director

18 shall be subject to confirmation by the Commission. The

19 Chairperson of the Commission shall fix the compensation

20 of the executive director and staff members without regard

21 to the provisions of chapter 51 and subchapter III of chap22 ter 53 of title 5, United States Code, relating to classifica23 tion of positions and General Schedule pay rates, except

24 that the rate of pay for the executive director and such

25 staff shall not exceed the rate payable for level 15 of the
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1 General Schedule classified under section 5107 of such

2 title.

3 (j) TERMINATION.—The Commission shall terminate

4 30 days after the completion of the final report.

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