Pell Grant Freezes under House Budget Resolution

As the Senate moves forward with its 302(b) allocations, House appropriators continue to deliberate on theirs. The lag means that the House of Representatives may still take up the  Budget Committee’s Fiscal Year (FY) 2017 budget resolution. This budget blueprint includes drastic cuts to crucial programs that provide support for low-income Americans, including the federal Pell grant.

The budget proposal aims to reduce the national deficit by $7 trillion over the next 10 years through a combination of spending cuts ($6.5 trillion) and projected economic growth. In addition to billions of dollars in cuts to mandatory programs like the Supplemental Nutrition Assistance Program (SNAP) and the Child Tax Credit, the budget proposes an $877 billion cut in federal non-defense discretionary (NDD) spending over the next decade. It would accomplish this by freezing NDD at $472 billion over the next nine years—lower than the $516 billion FY 2017 cap set by last year’s Bipartisan Budget Agreement (BBA) law. With the BBA setting overall discretionary spending levels for FY 2016 and 2017, there may be less pressure on Congress to pass this separate budget resolution, which, if enacted, would significantly undermine agreed-upon investments.

This budget proposal would freeze Pell grant awards at their current level for the next 10 years, decreasing college affordability for low-income students. Such a budget provision would also preclude any legislation to extend the statutory annual increases to maximum Pell award levels, which are set to expire in 2017 but must be continued to avoid eroding the value of the Pell grant. The FY 2016 Pell award, which is set at $5,815, already only accounts for 30 percent of the average cost of college attendance. Given tuition increases and inflation, allowing these increases to expire would translate to even greater unmet need and higher levels of debt for Pell recipients. Proponents of the budget argue that federal cuts in Pell and student aid programs will curb high college costs. However, their claim that colleges capture federal funding to increase costs and profit is not backed by consistent evidence. Pell cuts would increase barriers to postsecondary education for low-income students and hurt the economy as employers increasingly seek workers with post-high school credentials.

While the budget resolution acknowledges the high cost of college and the continued importance of Pell grants, it does not take into account the indirect costs that affect the growing number of low-income and nontraditional students. For these students, who are often independent adults over age 25 with jobs and families, Pell grants can be just as important for postsecondary success as other means of public support that also face threatened cuts and changes. For those enrolled in community colleges, where nontraditional students are heavily concentrated, cuts to both Pell grants and low-income assistance programs could have an even more devastating effect.

In addition to cutting Pell funding, the accompanying committee report to the resolution calls for policy changes that would limit access to Pell aid, particularly through the roll back of eligibility expansions in the College Cost Reduction and Access Act -- expansions the committee report points to as a cost driver for the Pell program. Not only would these proposals be damaging to low-income students; the committee report’s justification for them is also misguided. While the cost of Pell grants did rise during the Great Recession, this increase was not driven by  eligibility expansion, but rather by increased demand, which has since subsided as the economy has recovered. Consequently, further restrictions to eligibility requirements would ultimately translate to greater costs and barriers for nontraditional students who receive Pell grants.

The House Budget Committee’s proposed cuts to higher education access for low-income students would be counterproductive to the resolution’s stated goals. Postsecondary degree attainment is critical for America’s workforce to be economically competitive today and in the future. In a time of increasing income gaps, for low-income Americans, access to an affordable postsecondary education is essential for economic mobility. Increasing affordability barriers rather than increasing resources and access would only deepen that disparity.