DOMENICI BUDGET PLAN FOR'87 WOULD FREEZE ALL ED PROGRAMS BUT GSL - Would Freeze and Reduce GSL

Sep 21, 2026

A Senate Budget Committee chairman proposes a fiscal 1987 budget resolution that would largely freeze higher-education programs at current levels while reducing the Guaranteed Student Loan (GSL) program. The plan reallocates about $30 billion in budget authority for functions including education and social services, with the Education Department receiving slightly below its current level. It would cut GSL costs through reconciliation and reauthorization measures, including recalling state agency advances, adjusting administrative allowances and reinsurance rates, and requiring high school credentials to qualify. Commentary also references prior Senate actions and House consideration.

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DOMENICI BUDGET PLAN FOR'87 WOULD FREEZE ALL ED PROGRAMS BUT GSL

Education Department budget share and program freeze

GSL reductions and qualifying requirements

PUBLIC COLLEGES,UNIVERSITIES WOULD SUFFER UNDER SENATE TAX PROPOSAL

Elimination of certain deductions and expected revenue effects

Effects on public vs. private higher education

Bond cap, scholarships, and tax treatment changes

FINN,ATWELL,NEWMAN AND HOWE:LOTS OF DISCUSSION,LITTLE AGREEMENT

DAILY Vol.14,No.50 Fr1day,March 14,1986 # DOMENICI BUDGET PLAN FOR'87 WOULD FREEZE ALL ED PROGRAMS BUT GSL The chairman of the Senate Budget Committee yesterday proposed a budget resolu-tion for fiscal 1987 that would freeze most higher education programs at theircurrent levels but reduce the Guaranteed Student Loan program(GSL). Sen.Pete Domenici,R-N.M.,unveiled a plan that would allot $30 billion inbudget authority for"function 500,"which includes education and social ser-vices programs.The Education Department's share would be $17.5 billion,justshort of its current $17.8 billion budget. Domenici's plan would freeze most education programs at the level now in ef-fect following the 4.3 percent cut ordered by the Gramm-Rudman-Hollings bal-anced budget law.But the plan would scale back GSLs by adopting proposalsraised in reconciliation and reauthorization measures now under consideration. Moving on reconciliation,the Senate was expected to vote yesterday on H.R.3128,an $18.1 billion reconciliation measure the House passed last week,whichwould trim GSLs by $806 million over three years(HED,Dec.24,1985)。 Domenici's budget resolution included GSL cost-savings proposed in s.1965,which would reauthorize the Higher Education Act.His plan also would recallthe rest of state agency advances in 1989 and 1990,eliminate administrativecost allowances for state guarantee agencies,lower reinsurance rates for thoseagencies and require students to have a high school degree to qualify for GSLs. Last week,the Senate Budget Committee rejected President Reagan's fiscal 1987budget proposal,which called for $2.6 billion in cuts(HED,March 10)。Thecommittee was expected to meet late yesterday to discuss Domenici's plan.Meanwhile,House Budget Committee Chairman William Gray,D-Pa.,introduced H.Con.Res.296,asking House members to take a stand on the president's fis-cal 1987 budget plan. The House was expected to vote on the measure yesterday.--Deborah L.Gold # PUBLIC COLLEGES,UNIVERSITIES WOULD SUFFER UNDER SENATE TAX PROPOSAL Public higher education institutions would lose valuable local-and state-gen-erated revenues under a tax reform plan unvelled yesterday by Senate FinanceCommittee Chairman Bob Packwood,R-Ore. The proposal,announced by Packwood at a news conference yesterday,would elim-inate the total deduction for itemizers of state and local sales and personalproperty taxes,but would allow a total deduction for real property taxes.(more) The proposal,which stil1 is in draft form,will be marked up by the SenateFinance Committee next Wednesday,said Packwood,who predicted his bill wouldbe modified in committee.President Reagan is "wholeheartedly behind"theplan,said Packwood,who added that he hopes to have a bill ready for Reagan'ssignature by Aug.15."We feel confident we're going to get a bill,"he said. E1iminating the deduction for local sales and personal property taxes wouldhurt public colleges and universities,which depend on state revenues generatedprimarily from state income and sales taxes,according to the American Asso-ciation of State Colleges and Universities(AASCU)。 Pressure PredictedState colleges and universities receive from 40 per-cent to 80 percent of their operating budgets from state governments,accordingto AASCU.If deductions for sales taxes were to be eliminated,states may bepressured to restructure their tax systems or face declines in revenue,ac-cording to Richard Novak,AASCU assistant director of government relation. Packwood's plan is more harsh than H.R。3838,the plan passed by the House lastyear,which would allow itemizers to continue deducting all state and localtaxes,including sales and personal property taxes(HED,Nov.26,1985)。 The senator's plan was kinder to private higher education institutions.UnderPackwood's plan,the charitable deduction for nonitemizers would be made per-manent,with no floor--as is contained in H.R。3838.Under H.R。3838,non-itemizers would be able to deduc

FAQs

What does the Senate plan do to most higher-education programs for fiscal 1987?

It would freeze most higher-education programs at their current levels following a prior Gramm-Rudman-Hollings cut.

How would the plan change the Guaranteed Student Loan (GSL) program?

It would scale back GSLs by adopting cost-saving proposals tied to reconciliation and reauthorization measures now under consideration.

What tax reform changes would Packwood's proposal make that could affect public colleges and universities?

It would eliminate the total deduction for itemizers of state and local sales and personal property taxes, while allowing a total deduction for real property taxes.

Sep 21, 2026

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