For higher education advocates, President Obama’s 2012 budget offers a delicate balancing act. While trying to protect the popular but underfunded Pell Grant program, the administration would make other student aid changes that may leave some low-income students paying more next year.
Pell has undergone tremendous growth in the past two years as a result of an increase in the maximum grant and heavier participation in the program during the recession. The U.S. Department of Education reports that the number of grants has increased from 6 million in 2008 to 9.6 million in 2010 as more young adults forgo the job market for college.
To maintain the current maximum grant of $5,550 and meet demand, the Obama administration would eliminate in-school Stafford Loan interest subsidies for graduate students and the policy of offering a second Pell Grant for undergraduates who enroll in college year-round.
Despite proposing tough choices, the administration is “keeping the Pell Grant program viable for the millions of students who rely on it to pay for college,” says Rich Williams, a higher education advocate for US PIRG. “Something has to be done to keep the program sustainable for the long term.” The cuts have caused concern, however.
The proposed changes “will undeniably have a negative impact on students,” notes Justin Draeger, president of the National Association of Student Financial Aid Administrators. But he adds that, facing a potential $20 billion Pell shortfall in an uncertain political and economic climate, maintaining Pell “is our highest priority.” The year-round Pell is a new program that began with the 2009-10 school year and allows low-income students to get a second grant, usually for summer classes.
A dearth of summer jobs may be pushing more undergraduates toward year-round college. “This benefit has proven to be extraordinarily costly — up to 10 times the initial estimates — and has not yet shown any evidence of accelerating students’ college completion time,” the Education Department said. The policy is costing the government about $7.6 billion.
Some higher education advocates say they are surprised by the administration’s recommendations. So far, the government had provided few numbers on use of year-round Pell, says Jason Delisle, director of the Federal Education Budget Project at the New America Foundation, a Washington, D.C., think tank.
