Late last year, House Republicans proposed a major reform of the federal government’s student aid programs for higher education.

At first glance, the CBO estimate for the Prosper Act appears to show savings for the government. The first table in the report lists a $14.6 billion spending cut over the coming decade.

The bill reforms the Pell Grant program, which provides grants to undergraduates with low and middle incomes.

Specifically, the bill includes a number of regulatory changes that increase the number of students eligible for Pell Grants. The CBO estimates that under the Prosper Act, an additional 1.1 million students would receive grants relative to current law.

The majority of the increase in Pell Grant spending would happen under a separate part of the budget: the discretionary side. Discretionary spending is subject to annual appropriations, unlike entitlement spending on student loans. Normally, that causes observers to ignore proposed increases in discretionary spending.

The law defines a per-student grant that the appropriations committee is under significant pressure to fund each year, lest it be blamed for cutting Pell Grants. Indeed, Congress hasn’t cut the maximum Pell Grant from its prior year level for more than two decades.

Read the full article on the Prosper Act by Jason D. Delisle and Preston Cooper at American Enterprise Institute