The Senate education committee approved a pair of bills that would reduce government subsidies to student-loan companies, increase student aid, and set higher-education policy for the next five years. The Senate's budget-reconciliation measure would use the savings derived from reducing subsidies to student-loan companies to pay down a portion of the federal deficit and create two new grant programs intended to help low-income students attend college. Although proposed subsidy cuts are not as deep as many lenders have feared, lenders warned that the bill's cuts to lender subsidies could drive smaller companies out of the federal student-loan program and force the remaining providers to scale back on borrower benefits, ultimately hurting middle-class borrowers. In addition to creating the two new grant programs, the Senate reconciliation bill would repeal a federal rule, known as "tuition sensitivity," that has prevented some students attending low-cost colleges from receiving the maximum Pell Grant. It would also raise the income cutoff for automatic eligibility for the maximum Pell Grant and it would ease the "work penalty," allowing working students to deduct more of their earnings when calculating their expected family contribution. In an effort to contain college costs, the reauthorization bill would require the secretary of education to establish a "higher-education price index" and to place colleges whose tuition and fees rose too fast, relative to the index, on a watch list. The bill would also take aim at conflicts of interest in the student-loan industry and would end the school-as-lender program. The bill would require international-studies programs applying for funds to explain how they "will reflect diverse perspectives and a wide range of views" and describe how they will deal with disputes regarding whether they are meeting that goal. It would also require the secretary of education to consider complaints lodged against a program when determining whether to renew its grant. During debate on the two bills, the education committee approved a handful of amendments, including one that would prohibit the Education Department from requiring Upward Bound programs to participate in an evaluation. The committee also adopted a "manager's amendment" that would soften provisions that would have increased federal oversight of institutions' transfer-of-credit policies. The House of Representatives passed its own version of the budget reconciliation, but has yet to deliberate on a bill to reauthorize the Higher Education Act. The House and Senate have until September to reach agreement on a compromise reconciliation bill.