Pell Grant Program Set for Adjustments

Feb 17, 2011

Last week, Republicans in the U.S. House of Representative announced a proposal to cut Pell Grants. Only days later, President Obama released his proposed 2012 budget, which would leave the loan program largely intact. Select provisions have been slated for change, however, which could impact some college students.

By Douglas Fehlen

Pell Grant 2012 proposed budget news funding cuts maximum year-round awards legislative Republican House

A Legislative Duel

Citing the need to cut $100 billion from the budget for the current fiscal year, House Republicans recently announced a measure that would cut the maximum federal Pell Grant by 15 percent, or $845. Analysis reveals that passage of this proposal would result in about 1.7 million low-income students losing eligibility for the loan program; those still able to get Pell Grants would have their awards cut.

In response to this Republican measure, President Obama has proposed in his 2012 budget retaining the maximum Pell Grant at its current level of $5,550. This should come as good news for students who receive aid from the program, though it must be noted that compromise during the legislative process could again threaten funding.

Pell Grant 2012 proposed budget news funding cuts maximum year-round awards legislative Republican House

Program Changes

While the president doesn't propose lowering the current Pell Grant maximum, his budget does outline some provisions that would usher in changes for the program. The most significant proposed change would eliminate the year-round Pell Grant. This aspect of the program, which largely benefits working students, allows individuals who attend college classes over the summer term to collect two grants in a single calendar year.

Obama administration officials suggest year-round grants have been targeted for elimination because they cost ten times more than expected and did not lead to increased student achievement. The proposed budget also calls for another significant amendment to higher ed funding: Under the plan, loans taken out for graduate study would no longer be eligible for interest subsidies.

Pell Grant 2012 proposed budget news funding cuts maximum year-round awards legislative Republican House

Contentious Days Ahead

President Obama's support for the Pell Grant program backs up his administration's stated goal to make college more accessible to all, including students in financial need. In fact, individuals in need number more than ever as the financial difficulties of the past few years have hit households hard. About nine million students are expected to participate in the loan program, up from about six million receiving Pell Grants in the 2008-2009 academic year.

Partisanship is sure to flavor the debate over Pell Grants; all provisions of the proposed budget are likely to be fiercely debated. House Republicans' calls to reduce the grants and the president's proposal to keep them largely intact are likely only the opening salvos in what is sure to be a contentious legislative session.

Learn more about changes to financial aid that could affect students in the coming years.

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