President Bush included in his proposed 2008 federal budget yesterday the largest single-year increase in the primary source of financial aid for low-income students in more than 30 years.
If the budget is approved by Congress, Pell grants would increase by $550 to $4,600 in October, providing the first boost in several years to a program that provides financial aid to 5.3 million college students. During the next five years, the maximum Pell grant would increase to $5,400.
While several Congressional Democrats, students and educational leaders applauded the initiative as a step in the right direction, many also chided the initiative’s specifics and questioned its potential effectiveness. Jim Boyle, president of College Parents of America, expressed concern that the Pell grant expansion’s heavy price tag would hurt other financial aid programs.
“It’s always positive when more money goes to student aid … but usually there are tradeoffs involved, and it appears that the tradeoffs are going to have a negative impact on some of the other student programs,” Boyle said. “However, I feel that the Pell grant is the most important federal aid program – it’s where the dollars get the biggest bang for the buck.”
Boyle’s concern lies in the initiative’s $15 billion cost. While the majority of the cost would be funded by cuts to lender subsidies – a reform generally agreed to be necessary – the rest of the money would be acquired in controversial ways, such as cutting both the Perkins loan and the Supplemental Education Opportunity Grant programs.
Like Pell, both programs also aid low-income families, a fact that worries some student leaders.
“The increase in the maximum Pell grant is very significant. … However, it also calls for deep cuts to critical aid programs,” said Colleen Spivey, organizer of the university’s chapter of MaryPIRG. “So while it acknowledges the Pell grant award, it largely represents a rearrangement of spending instead of a recommitment to higher education.”
Massachussetts Sen. Edward Kennedy (D), who chairs the Senate’s Health, Education, Labor and Pensions committee, expressed similar concern yesterday. Although he agreed with the intent of the president’s proposal, he lamented the cut of the Perkins program and credited Democrats for getting the ball rolling on educational reform.
“The President’s proposal to cut outrageous lender subsidies and redirect those funds into a long-overdue increase in the Pell Grant shows how a Democratic Congress is changing the nation’s priorities,” Kennedy said in a statement.
The president’s proposed increase follows nearly four years of Pell grant stagnation and numerous recent Democratic attempts to bolster the grant. Last week, the House of Representatives approved by a strong majority a bill that would increase the maximum Pell grant by $260. If signed into law, the increase will be the first since 2002.
In recent months, Democrats have attacked rising educational costs from several fronts. Last month, the House passed the College Student Relief Act by a vote of 356 to 71. The bill would cut the interest rate on certain Stafford loans given to lower-income students in half during the next five years.
The Pell grant’s purchasing power is also a concern, say critics, who point out its value has diminished with inflation and a changing economic landscape. According to the College Board, the maximum Pell grant two decades ago accounted for nearly 60 percent of the cost of a four-year public college education. Last year, that percentage was cut almost in half.
“In an ideal world, the Pell grant would have increased even more,” Boyle said. “But this is certainly a step in the right direction.”
The president’s $3 trillion budget also calls for the expansion of Academic Competitiveness Grants, which are given to low-income students who complete certain rigorous coursework in high school. It would also provide for a $2,000 increase in the federal loan limit for college juniors and seniors, putting them on par with freshmen, sophomores and graduate students, who received the increase under the Higher Education Reconciliation Act last year.
Some have charged that these initiatives, which allow students to borrow more money from lenders, harm students by putting them further in debt. But Boyle argued that the benefits of students taking money from the federal government – instead of less-stable private lenders – outweigh the cost.
“[The initiative] tends to get miscontrued as one in which we’re encouraging students to get more into debt,” he said. “But the reality is that students are getting into more debt anyway, and the reality is that’s it’s better to go through federal programs instead of through the private loan market.”
Contact reporter Raquel Christie at christiedbk@gmail.com.
