Bills Seek to Limit College Grants for Legal Immigrants : Education: California students would be hit hardest by the welfare reform proposals, U.S. study says.

About 120,000 legal immigrants in California could lose as much as $196 million in federal education aid under proposed welfare reform legislation being considered in Washington, according to a new draft report from the General Accounting Office.

The House and the Senate have each passed blueprints for overhauling the welfare system that would significantly curtail benefits to legal immigrants, including Pell grants and other federal financial aid for students.

The GAO report found that if those bills became law, more students would lose financial aid in California than in any other state. Legal immigrants make up nearly one-third of Pell grant recipients in California, the report said, compared with the national average of 10%. The report analyzed data from the 1992-93 school year.

This week, as legislators begin ironing out the differences between the House and Senate bills, higher education advocates are speaking out. They say that by limiting access to student aid, the proposed changes would eliminate steppingstones that legal immigrants have used for decades to escape poverty.

“These are taxpayers. They’re people who live here permanently,” said Terry W. Hartle, vice president of the American Council on Education, which represents 2,000 public and private colleges. “If we are trying to make people productive in our economy, we should be encouraging them to get educated. This slams the door.”

The Pell grant program, designed to help the neediest students afford college with a maximum award of $2,340 per year, is not the only area that could be affected. Legal immigrants could also be limited in their ability to obtain subsidized Stafford loans, upon which the federal government pays interest while students are in school.

Nationwide, the GAO report found that 59% of legal immigrants who received federal educational aid attended public colleges, 19% attended private colleges and 22% enrolled in vocational schools.

The report indicated that community colleges may be especially affected by the proposed changes--for example, 78% of the students receiving Pell grants at Glendale Community College were immigrants.

But larger public institutions--including several campuses of the University of California and California State University--could be broadly affected as well.

For example, the report found that more than 35% of UCLA’s Pell grant recipients were legal immigrants who received more than $4 million in federal aid. At UC Berkeley, the Pell grants received by legal immigrants in one year totaled $2.9 million.

A separate analysis of all nine UC campuses performed by the president’s office found that more than 25% of UC’s need-based aid recipients are legal immigrants.

“The total dollars that could be lost in the worst-case scenario amount to $21 million in Pell grants and $31 million in subsidized loans,” the UC analysis concludes. “These would either go unreplaced or would be replaced by less attractive unsubsidized loans.”

CSU Chancellor Barry Munitz said his 22-campus system stands to lose about the same amount. He called the proposed changes disturbing, not only because they further restrict a dwindling pool of student aid, but also because they send a negative message about legal immigrants.

“These are people who have done everything right. They’ve followed directions, filled out forms. And now comes this,” Munitz said. And unless the state of California decides to increase student aid to make up for the deficit, “you have to assume that a fair number of these students [will] go away,” he said, which would cut university revenue.

The same would be true at private colleges, where financial aid officers are busy tallying how the changes would affect them. At USC, for example, 1,900 students probably would be affected, and officials worry that the university could not afford to make up the lost aid, causing some students to discontinue their studies for lack of funds.

“The university’s resources have been strapped. . . . We’re making between $60 and $70 million in grants to needy students as it is,” said Michael Halloran, USC’s associate vice president for government relations. “It would be a big hit.”

The Senate and House bills, though similar in intent, differ in the details.

Both the Senate and House versions would restrict benefits to many immigrants who now qualify for assistance by changing eligibility requirements. One key change would mandate that a legal immigrant sponsor’s income be considered available to the immigrant when assessing eligibility for financial aid.

Under the House bill, this mandate would continue until an immigrant becomes a citizen.

The Senate bill would require it until an immigrant earns enough money to pay taxes for at least 40 quarters, or 10 years. The Senate version, therefore, would restrict benefits for many people who have already become citizens.

The Senate version would also deny virtually all means-tested federal benefits, including educational aid, for five years to legal immigrants who arrive in the country after the bill is enacted.

Both chambers are expected to fight hard to retain their own provisions on immigrant benefits. House members, for instance, feel the Senate version is unconstitutional because it treats naturalized and native-born citizens differently when determining benefits for the first time.

Policy analysts and congressional staff members say it is all but certain that the immigrant provisions will be included in a final package because they save billions of dollars and opposition to them in Congress and from the White House has been mild.

The compromise version will be sent to President Clinton for his approval before welfare reform can become law. Clinton is expected to pass it, although he has threatened to veto legislation that includes some of the strictest provisions.