President Bush called on Congress to increase the limit on what college freshmen may borrow from the federal student-loan programs from $2,625 to $3,000, as part of his 2005 budget request released on Monday. The budget otherwise included little new money for student aid.

Under the spending plan, the maximum Pell Grant would remain at $4,050 for the third year in a row. The president's budget would leave both College Work-Study and Supplemental Educational Opportunity Grants, which augment Pell Grants for needy students, at their 2004 levels.

The president's request would not provide any new funds for the Perkins Loan Program, which provides low-interest loans that go predominantly to students from low-income families. In addition, the budget request would eliminate the Leveraging Educational Assistance Partnerships program, which matches each dollar that states commit to need-based aid.

College lobbyists and student advocates said they were deeply disappointed with the budget, saying it would leave many low-income students in the lurch. "This is a budget that leaves college students behind," said Becky Timmons, director of government relations for the American Council on Education. "It completely fails to recognize that this country's economic future depends on providing hope and opportunity to all students qualified to attend college."

The president did include $33-million for a new pilot program that would reward low-income students who take specific college-preparatory courses in high school with an additional $1,000 in Pell Grants for their first year in college. Students eligible to receive those funds must take part in State Scholars programs, which currently operate in 14 states. The programs provide college scholarships to high-school students who take three years of mathematics and science, as well as four years of English and social studies, and courses in foreign languages. The president's budget includes an additional $12-million to encourage more states to start these programs.

Bush administration officials said on Monday that the additional Pell Grant funds would help better prepare low-income students for college. "We know students who complete a rigorous curriculum are more likely to pursue and succeed in postsecondary education," Education Secretary Roderick R. Paige said at a news conference.

Besides setting spending levels for student-aid programs, the president's budget proposal provides the first glimpse of the administration's priorities for the impending renewal of the Higher Education Act, the law that governs most federal financial-aid programs for students. Members of Congress hope to complete their work to renew the act, a process called reauthorization, this year.

Lenders and college leaders were pleased that the president included among his reauthorization recommendations the proposal to increase the borrowing limits for first-year students. For many colleges, raising the loan limits is the most important student-aid issue Congress will face as it works on the legislation.

The current ceiling on what students may borrow from the government -- $2,625 for a first-year student, $3,500 for a sophomore, and $23,000 over all -- was set more than a decade ago and lags far behind the needs of today's students, many college officials say.

Under the administration's plan, the freshman limit would grow to $3,000, but the overall limit would remain at $23,000.

That plan, however, falls far short of a proposal being advanced by the Coalition for Better Student Loans, a group of college lobbyists, officials in the student-loan industry, and others. The coalition's proposal would increase the overall borrowing limit to $30,000, allowing freshmen to borrow up to $4,000, and sophomores up to $6,000. After that, students would receive "flexible borrowing accounts" of up to $20,000 to be used as needed during the remainder of their college years.

The coalition's proposal, however, carries a heavy price. According to the Congressional Budget Office, the government would have to spend about $20-billion over the next 10 years to raise the borrowing limit for undergraduates to $30,000 (The Chronicle, February 2).

The Bush administration took a more modest approach. According to budget documents, raising the freshman limit to $3,000 would cost the government $775-million over the next 10 years.

The president's budget request also reserves an additional $3-billion over 10 years for unspecified student-loan benefits. Administration officials said they would work with Congress to determine whether that money should go to further increase loan limits, or for other uses, such as reducing the origination fees borrowers must pay to obtain their loans.

Still, coalition members praised the White House for signaling its support for raising the loan limits. "The administration has got to be applauded for recognizing that freshman-year loan limits need to be increased," said Brett E. Lief, president of the National Council of Higher Education Loan Programs, which lobbies on behalf of guarantee agencies. "It's an important first step."

Student advocates, though, criticized the administration for supporting increases in loan limits while leaving spending on most other student-aid programs flat.

"Using limited resources to raise student debt rather than increase grant funding reflects the administration's skewed priorities," said Kate L. Rube, higher-education adviser for the State Public Interest Research Groups.

The president's budget request includes several other reauthorization recommendations. The administration is asking Congress to:

Revise the formula that the government uses to distribute money for the three campus-based federal student-aid programs -- College Work-Study, Supplemental Educational Opportunity Grants, and Perkins Loans -- to ensure that those programs are serving the neediest students.

Clarify that student-aid applicants who are convicted of drug-related offenses are ineligible for federal student aid only if the offense was committed while they were attending college.

Require students to pay a fee, equal to 1 percent of the amount they have borrowed, to student-loan guarantee agencies.

Expand extended-repayment options for borrowers.