Dive Brief:
- Sen. Tom Harkin (D-IA), the outgoing chairman of the U.S. Senate’s education committee has proposed taking $303 million from the Pell Grant program to fund companies that collect monthly payments from student loan borrowers.
- Student advocates are outraged by Harkin's proposal, the Huffington Post reports.
- The proposal is part of a 2015 fiscal year spending bill from July 24 — the full text wasn’t revealed until six weeks later, and the item wasn’t noticed until recently.
Dive Insight:
Because the U.S government’s spending authority expires on Thursday, Congressional negotiators are in a rush to finalize 2015 fiscal year spending plans. As HuffPost points out, the proposal would take away funding designated for low-income college students and use it pay loan contractors whose collection practices have been deemed shady by consumer advocates and federal regulators. The Pell Grant program now has a surplus, but the Congressional Budget Office predicts it will be in deficit territory by the 2017 fiscal year.