UPDATE: The Senate passed the American Recovery and Reinvestment Act 61 to 37. The bill will now enter conference committee to reconcile the House and the Senate versions of the bill. Final passage is expected early next week. 

There is some good news when it comes to student aid in the Senate’s version of the American Recovery and Reinvestment Act – it looks like funding for Pell grants will not be cut out of the bill under a proposed “bipartisan compromise,” which means that they will probably be included in the final version of the Senate bill. This greatly increases the chances that Pell grant funding will be included in the final version of the bill that will hopefully pass both houses of Congress.

There is also some bad news – while Pell grants will probably not be cut, there may still be significant cuts to higher education. For example, the original version of the Senate bill included $3.5 million for campus modernization projects, but this provision would be completely eliminated from the bill if the bipartisan compromise is adopted. The version of the stimulus bill that passed the house included $6 billion for this purpose.

The compromise will also contain large cuts to policies that would help states facing large budget cuts to sustain critical public services to K-12 and higher education, and help to mitigate the effects of state budget cuts to education. The Congressional Budget Office has reported that these kinds of provisions help to stimulate the economy better than all forms of tax cuts, and have been identified as some of the more efficient ways to stimulate the economy.

The compromise also includes large cuts to other aspects of the bill, and these cuts have made the stimulus package less efficient at stimulating the economy. The Center for American Progress has estimated that the Senate’s version of the American Recovery and Reinvestment Act will create between 430,000 and 538,000 fewer jobs than the House of Representative’s version of the bill if this compromise is adopted. The House of Representative’s version of the bill included more aid to students and investment in higher education even before the recent cuts.