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Obama, GOP Propose Cuts to Pell Grants

by Christopher Carter | University of Washington

F Posted in: News and Politics P Posted on: February 18, 2011
college Image courtesy of Flickr, greatdegree.

Last March, President Barack Obama promised to help get students through college.

Now, a year later, he’s keeping that promise. Kind of.

With the unveiling of the President’s budget this past week and a spending bill submitted by the GOP majority in the House of Representatives—both of which call for cuts to Pell Grants in different ways—students relying on federal financial aid may be left with difficult decisions on whether they can continue with school.

While the White House budget calls for the enactment of the “Pell Grant Protection Act” to keep the maximum award at $5,550, an increase of more than $800 from two years ago, the funds to make that happen will not come without pain for some students—namely those working on graduate degrees and those on accelerated programs taking courses in the summer.

“The costs [of Pell Grants] have gone up significantly. If we continue on this pace, sooner or later what’s going to happen is we’re just going to have to chop off eligibility,” said Obama in a White House press conference Tuesday. ”We’ll just have to say, ‘That’s it, we can’t do this anymore, it’s too expensive.’”

In order to keep the maximum grant at its current level and avoid cutting eligibility, the Obama administration has proposed that the “year-round” Pell Grant option (which allows for two awards in the same school year) be cut in addition to eliminating an in-school interest subsidy for graduate students.

The “year-round” option for students studying during summer was enacted with the re-authorization of the Higher Education Opportunity Act and went into effect less than two years ago.

The option appears to have been a mistake, with the extra grants costing 10 times more than originally projected and failing “to demonstrate a meaningful impact on students’ academic progress,” according to budget documents released by the White House.

In a statement following the announcement of the budget, U.S. Secretary of Education Arne Duncan said that the Obama administration is focused on keeping the award at its current maximum, even if it means reducing Pell Grant options to once per year.

“We project that a record nine million students will use Pell Grants to pay for part or all of their college education. That’s a 50 percent increase since the President took office. We’ll continue that investment by maintaining the maximum grant at $5,550,” he said in a statement. “For many students, Pell Grants are an economic lifeline – they are the difference between dropping out and graduating.”

The Obama administration also hopes to cut costs and save money by eliminating the subsidized loans given to graduate and professional students, inevitably adding to those students’ growing debt as the cost of higher education continues to rise.

The President’s budget must still be approved by Congress, and, if the Republicans get their way, the so-called Pell Grant Protection Act may not happen and Pell Grants could see a direct cut.

The GOP wants to slash the grant award to $4,705- according to a spending bill released by the U.S. House of Representatives on February 11.

With both sides of the aisle proposing cuts, some university administrators are standing by anxiously.

“We’re in a ‘wait and see mode,’” said Ina Sotomayor, senior associate director of Financial Aid at the University of California, Los Angeles. “If the legislation passes, there’s not too much we can do, other than deal with the consequences.”

UCLA is ranked number one in universities with undergraduate students receiving Pell Grants — about 33 percent — according to data from U.S. News and World Report.

For a university where one in three students relies on Pell Grants, the proposed cuts could be disastrous.

“If those changes should come to pass, there is definitely going to be some fallout with students not being able to continue or, in the future, not applying,” Sotomayor said.

Christopher Carter Christopher Carter Christopher Carter is a NGJ Staff Writer and a student at the University of Washington. Christopher is a English major and a Russian Language and Slavic Literature Minor. Prior to retuning to school last winter, Christopher worked in various newsrooms for the last four years covering everything from school administrators, education, business and government.

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