By Paul Basken

Washington

Updated: 6:37 p.m., U.S. Eastern time

Congressional Democrats are making plans to trim a proposed increase in Pell Grants, and to cut out other anticipated education-spending programs, in a rush to craft a final version of their long-awaited student-loan legislation.

Democrats at work on the compromise bill, which faces a series of votes over the next two weeks in the House of Representatives and the Senate, also may eliminate proposed spending on community colleges, lobbyists and Congressional aides said on Friday, and may even close out the Perkins Loan Program, which provides low-interest loans to needy students.

The bill, under consideration for most of the past year, would save the government money by ending the subsidies given to private lenders that distribute federal student-loan funds, and instead would require all colleges to use the Education Department's own direct-lending system.

An initial analysis last year by the Congressional Budget Office showed the bill would save $87-billion over 10 years, creating a critical source of money for financing education projects. But a more recent analysis by the budget office put the figure at $67-billion, leaving Democrats in a scramble to reduce their list of beneficiaries.

The reduction is coming as the bill, approved last September in the House, appears finally headed for action in the Senate. That's because President Obama and his Democratic allies may be about to move ahead with a health-care bill, ending a logjam that has delayed the student-aid bill for months.

Both the health-care bill and the student-aid bill appear to lack enough support in the Senate to gain the three-fifths majority necessary to end a filibuster. Democrats instead plan to combine the measures in a single bill by using the process of reconciliation, in which legislation that would produce a net reduction in federal spending can pass the Senate with a simple 51-vote majority.

In a sign that progress may finally be at hand, Mr. Obama postponed a scheduled trip to Asia next week so he could help Congressional Democrats rustle up the necessary votes. The House appears ready to pass a version of the combined bill next week, with a committee vote early in the week and a floor vote by the end of the week, according to lobbyists tracking the plans. The Senate would then consider the measure the following week.

Mr. Obama has proposed raising the maximum Pell Grant award each year by an amount equal to the rate of inflation plus one percentage point. The new compromise, needed to bring total spending on the student-aid bill down to $67-billion, could mean that Congress gives up the extra percentage point, some lobbyists have said.

The cuts could also mean that Congress eliminates a proposed program to help community colleges, sharply reduces or eliminates altogether the Perkins program, and cuts financing for school construction on the elementary and secondary level, lobbyists and Congressional aides said. The lobbyists and aides spoke on the condition of anonymity because of the sensitive, fast-changing nature of the negotiations now taking place.

Another element of the bill — known as the College Access and Completion Fund, designed to support efforts by individual states to raise the college-completion rates of low-income students — also may be cut back. But, the lobbyists said, Democrats appeared determined to maintain the spending proposed for historically black colleges and other minority-serving institutions.

Several higher-education lobbyists and Congressional aides said, however, that the exact mix of cuts remained fluid, especially given the need to win votes on the floor of the House and Senate for both the health-care bill and the student-aid bill.

The Committee for Education Funding, a coalition of more than 80 groups representing educators and institutions at all levels from kindergarten through college, wrote on Friday to members of Congress, urging them to keep the Pell Grant increase as a priority.

The proposed increase in the Pell Grant program is necessary to prevent every Pell Grant recipient from having his or her grant cut by at least $2,500, the coalition said. Failure to pass the bill would also leave Congress needing to find an additional $19-billion, beyond the $17-billion approved last year, to meet the expected growth in demand for the Pell Grant, the coalition said.

"This would wipe out any opportunity for funding increases in other education programs for both elementary-secondary and postsecondary education," the group said.