by Lisa Thompson
Federal Pell Grant awards, which help low-income students pay for college, may be reduced for the 2011-2012 academic year as the U.S. government works to decrease spending. If no changes are made, the program could face a shortfall of $20 billion because more demand has been placed on the program by an increase in eligible students.
A spending bill (H.R. 1) passed by the U.S. House of Representatives in February would decrease the maximum grant award of $5,550 by at least $845 (15 percent). The bill would also eliminate 56 education programs, including the Supplemental Educational Opportunity Grant, the Workforce Investment Act (WIA), and many programs serving low-income or minority students.
In 2009-2010, 134,000 Minnesota students received a Pell Grant. The changes, if enacted, could result in a decrease of at least $113 million in Pell grant funding each year as well as loss of Pell eligibility for some students.
In contrast, the president’s Pell Grant Protection Act proposal would seek to maintain the current grant maximum, but at the expense of other education programs and policies. This proposal would eliminate several programs, including:
- “year-round” Pell Grants, enacted less than two years ago to accelerate degree completion
- interest subsidies for graduate student loans
- Robert C. Byrd honors scholarships
- Leveraging Educational Assistance Partnership (This program was eliminated by the temporary budget bill signed by President Obama on March 2.)
Cuts Would Affect the Minnesota State Grant
The Minnesota State Grant program would also be impacted by a reduction in the Federal Pell Grant maximum award. The state grant program is designed to adjust to changes in Pell funding. As a result, Pell Grant-eligible Minnesota students would receive larger awards, costing the state grant program an additional $55 million each year. This is problematic since the Minnesota State Grant program is already experiencing a spending shortfall due to flat funding and increases in enrollment and eligible financial aid applications. Awards were prorated beginning in the 2009-2010 academic year because of this. Pell Grant cuts would deepen this shortfall.
What You Can Do
Start by writing or calling both your state and U.S legislators to let them know that these programs are needed. While it's unlikely to result in the infusion of new money or stop budget cut discussions in the current economic climate, it's important that elected officials know that need-based programs are valued and have public support.
Student and parents should also explore are ways to earn college credit in high school to reduce the cost of college later. Plus, saving a little very month—even small amounts—can add up over time. Be sure to check out 34 Ways to Reduce College Costs for more tips.