Pell Grant Ups and Downs

Apr 13, 2011

Pell Grants enable students to pay for college without incurring debt. Unfortunately, the federally-funded program has faced a tumultuous past few years. Funding has ricocheted up and down, resulting in a confusing and difficult situation for students who rely upon the support the grants provide.

By Jeff Calareso

College money

Pell Grants' Rise and Fall

Pell Grants are offered through the U.S. Department of Education and are intended to benefit low-income families. Unlike loans, you don't need to repay a Pell Grant, which can help you avoid the debt that often hampers recent graduates. The Pell Grant program, which began in 1973, also benefits colleges and universities when they look to diversify their student body; the grants can break down the economic barriers that prevent segments of the population from attending a postsecondary institution.

Throughout much of the history of Pell Grants, the average student could cover about two-thirds of his or her college expenses through grant funding. Since 1990, tuition and other fees have risen disproportionately to increases in the average Pell Grant amount. By 2006, Pell Grants were covering less than one-third of expenses. When President Obama took office in 2008, a Pell Grant was still helpful, but low-income students often needed to supplement grants with loans, which meant incurring worrisome debt.

Grants Caught in the Middle

The Obama Administration has worked to support Pell Grants despite the need for financial cuts in most government programs since the 2008 recession. In 2010, the Democrat-controlled Congress passed a bill that provided Pell Grants with a huge influx of cash. The bill was designed to prevent a looming massive cut to the program in which up to half a million students could have lost funding and the maximum grant might have been cut by more than half.

President Obama

Yet what seemed secure in 2010 is in jeopardy again in 2011. The Republicans, who now have more power in Congress and are heeding calls for sweeping budget cuts, want to cut approximately $6 billion from the program, or about 15%. The change would cause the current maximum grant of $5,550 to be cut by $845.

Impact on Students

Over nine million students rely on Pell Grants, up from 6.2 million in 2008. The timing of the proposed cut could have massive ramifications for these students. By the time it might take effect, which is in late spring, many college decisions will be finalized. Colleges will need to send new letters to students outlining updated aid amounts. Students who thought they were financially capable of attending a particular school and therefore made commitments may suddenly realize they can no longer afford it.

While politicians debate over where to make cuts in the budget, students are getting stuck on this see-saw of financial aid. Because of the nature of Pell Grants, these fluctuations of support disproportionately affect poor students. Should the cuts pass, they will likely prevent many students from pursuing their dreams of higher education.

Cuts to Pell Grants could exacerbate what are already significant troubles for poor and minority students at public universities.

What is your highest level of education?

Some College
Complete your degree or find the graduate program that's right for you.
High School Diploma
Explore schools that offer bachelor and associate degrees.
Still in High School
Earn your diploma or GED. Plan your undergraduate education.

Schools you may like:

Popular Schools

The listings below may include sponsored content but are popular choices among our users.

Find your perfect school

What is your highest level of education?