News from the
Committee on Education and the Workforce
John Boehner, Chairman

FOR IMMEDIATE RELEASE
November 25, 2003

          WASHINGTON, D.C. -- House Republicans, led by Rep. Sam Johnson (R-TX), have introduced the Student Aid Streamlined Disclosure Act (H.R. 3613), legislation that would strengthen the popular Pell Grant higher education program by reducing fraud in the program -- fraud that cheats America's most disadvantaged students.

          While protecting taxpayer privacy, H.R. 3613 would require the federal government to improve the verification process for Pell Grant awards through an IRS data match. In addition to helping to reduce the under-awarding of Pell Grant benefits for students who actually qualify for more generous awards, the proposal could free up as much as $340 million that Congress could use to better serve the increasing number of needy students legitimately receiving Pell grants, increase the maximum Pell Grant award for students, or reduce the current budget shortfall in the Pell Grant program for future recipients.

          House Education & the Workforce Committee Chairman John Boehner (R-OH), an original co-sponsor of the bill and a strong supporter of Pell Grants, praised Rep. Johnson for proposing the measure to protect disadvantaged students and strengthen the Pell Grant program.

          "Pell Grant funds should be used to benefit needy students, and needy students alone," Boehner said. "The federal government needs to do a better job of ensuring the rights of needy students are protected against abuse and fraud in the Pell Grant program. This proposal is about protecting taxpayers and disadvantaged students from fraud and bad government. I commend Sam Johnson for his leadership in introducing it."

          Key facts about the Student Aid Streamlined Disclosure Act (H.R. 3613):

• Fraud Cheats Disadvantaged Students, Weakens Pell Grants. In testimony earlier this year before the House Budget Committee, the U.S. Department of Education’s independent Inspector General John Higgins testified that $300 to $400 million in Pell Grant aid was erroneously awarded during the last year on record because some applicants misreported their income levels on their federal student aid applications. The Wall Street Journal pointed out in a July 22nd “Waste Not, Deficit Not” editorial that Higgins described this estimate as “conservative.” A recent study of applications filed during fiscal years 2001 and 2002 found the Education Department provided $602 million in Pell Grants to individuals who were not eligible.

• Protecting Taxpayer Privacy. Johnson's proposal would provide for income verification for every student financial aid application, but would require disclosure of personal information on file with the IRS only in cases where the discrepancy is large enough to impact the student grant or loan. Sensitive tax information from the IRS could not be disclosed directly to schools or contractors, but only could be disclosed to Department of Education officials or to the taxpayer who filed the return.

• More Students Than Ever are Benefiting from Pell Grants. Boehner noted that the number of students benefiting from Pell Grants has increased by nearly one million under President Bush, a number that would increase again significantly next year under the President's FY 2004 Budget proposals. H.R. 3613, if enacted, would make it possible for Congress to better serve the increasing number of needy students legitimately receiving Pell grants, increase the maximum Pell Grant award for students, or reduce the current budget shortfall in the Pell Grant program for future recipients.

          Boehner expressed hope the proposal could be enacted with bipartisan support. Education & the Workforce committee Republicans earlier this year called for the IRS data match for Pell Grants in a report submitted to the House Budget Committee. Democrats did not object to the proposal in the "minority views" they submitted along with the report.