Resources & Publications

Threats to Pell Grants Remain

Sep 27, 2011

By Vickie Choitz

As Congress weighs how to fund the government in 2012 and the Joint Select Committee on Deficit Reduction continues its work to cut about $1.2 trillion from the deficit, funding for the Pell Grant program continues to be under threat in two specific ways.

Smaller than anticipated, but real threat in Fiscal Year 2012: Thanks to the work of tens of thousands of advocates and nearly 100 organizations around the country, the Budget Control Act of 2011 that passed in August included $17 billion to cover a significant amount of the projected shortfalls in Pell Grant funding for the next two fiscal years. Unfortunately, it still did not fully fund the program, which faces a projected $1.3 billion shortfall for next year and $1.6 billion in Fiscal Year 2013.

The Senate Appropriations Committee has approved a bill that would fund the Pell Grant shortfalls using savings from eliminating student loan interest subsidies during the six-month grace period before repayment begins (students would still have the full grace period before having to start repaying the loan). This provides enough to cover the projected FY12 shortfall and some of the projected FY13 shortfall. This proposal is one of the least harmful options for fully funding Pell Grants, and the House of Representatives should include this funding provision in its appropriations bill.

Potentially large, but unknown threat in continued deficit reduction negotiations: Although the Joint Select Committee on Deficit Reduction is just beginning to deliberate how to achieve deficit reduction and has not indicated the Pell Grant Program is a specific target, lawmakers continue to express serious concern over the size of the program. Significant cuts could very likely still be on the horizon, including reducing the maximum grant and making harmful changes to student eligibility. More specifically, student eligibility changes could include: eliminating Pell grants for students attending school less than half time; ending an option called Ability to Benefit that allows students without a high school diploma or equivalent to receive aid after showing they can succeed in college; increasing the number of credit hours required for full-time status, and limiting the number of semesters students can receive Pell grants. Another proposed change would roll back expansions enacted in 2007 in the federal financial aid eligibility formula to increase aid to working students.

Such eligibility changes would disproportionately harm low-income, working students and those attending part-time. Low-income students have unique needs. Some have families and can only attend school part-time. Many require the maximum Pell grant (currently $5,550) to pay for school. And because many have family, work and other obligations, they may require a longer period of time to finish their degree. CLASP interviewed three Pell Grant students for Spotlight on Poverty and Opportunity to illustrate the real impact Pell Grant cuts would have for low-income students - including traditional and nontraditional, young and middle-aged.  Their stories are good reminders of what's at stake.

As the Joint Select Committee begins its task of recommending about $1.2 trillion in deficit reduction over the next decade, it should protect Pell Grant funding for low-income students. These students and their families are already bearing the burden of deficit reduction through cuts in programs that benefit families. Instead of focusing deficit reduction talks around programs that alleviate poverty, promote healthy children, provide job training and work opportunities, the Joint Select Committee should consider a more balanced approach, including raising revenues.

The Pell Grant program is critical to helping our nation meet education and skill demands. The program aids more than 9 million low-income students, and proposed changed would disproportionately harm them and impede their opportunity to gain skills and education and good jobs with family-sustaining wages.  

To learn more about Pell Grants, the harmful proposed cuts, and how you can help, visit CLASP's Save Pell page.

See related article: Threats to Pell Grants Materialize in the House >>

site by Trilogy Interactive