President's Pell Grant Proposal Under Fire

    The American Council on Education and various college leaders who supported President George W. Bush’s plan to increase the maximum Pell Grant cap are criticizing his parallel termination of the Supplemental Education Opportunity Grant, the Leveraging Educational Assistance Partnerships and Perkins loan programs.

    Last week, Congress passed a spending bill that will increase the maximum Pell Grant award from $4,050 to $4,310, and Bush signed the bill into law. The $260 increase — the first in five years — does not eliminate any existing student aid programs. However, Bush’s 2008 budget, which Congress has yet to address, calls for a Pell Grant cap of $4,600 with a steady annual increase to $5,400 by 2012 at the expense of the SEOG, which would override the recently passed bill.

    Bush’s proposed consolidation has created a polarized battle. Advocates favor a simpler federal aid program for students, claiming that students interested in pursuing higher education can become deterred by the complexity of various government aid programs, thus creating a barrier to college access. Opponents argue that the union of the two programs would considerably damage the funding of education programs.

    Student lobbying associations, financial aid administrators and students have been engaged for years in a fight to increase the Pell Grant maximum, and although this year’s boost was designed to encompass the scope of other federal aid programs, it resulted in an overall decrease in funding for higher education, UCSD Financial Aid Director Vincent De Anda said.

    Bush’s budget bill, which abolishes the SEOG, L.E.A.P. and Perkins programs, is designed to reduce the national debt by $3.648 billion by 2008 through eliminating $4.3 billion in federal student funding and increasing mandatory student grants and loans by only $672 million. An estimated 36 percent of students now receiving SEOG funding will lose as much as $500 for the 2007-08 academic year.

    “”A lot of families will no longer be eligible for the Pell Grant program under the president’s 2008 budget proposal,”” America’s Student Loan Providers Executive Director Kevin Bruns said.

    Six and a half million students nationwide presently receive Pell Grant and SEOG funding, with the SEOG providing more than $880 million. Eliminating the latter grant would drop qualified recipients to approximatley 5.5 million.

    About 5.3 million students receive Pell Grants nationwide. Currently, 6,600 UCSD students receive the grants, and $952,000 is allocated to the university to disperse among its lowest-income students.

    “”Merging the SEOG into the Pell Grant program eliminates needless redundancy,”” said Mark Kantrowitz, publisher of FinAid.org. “”Also, the Pell Grant is administratively less expensive to handle and disperse [than the SEOG]; consolidating the two would actually save a little bit of money that can then be readministered in the form of financial aid.””

    But there still is an immense risk in favoring the elimination of such a program, as the Bush administration has the potential to get rid of the SEOG, L.E.A.P. and Perkins programs without increasing Pell Grant funding, according to Kantrowitz.

    The Pell Grant and SEOG programs are both federal grant programs, whereas Pell Grant eligibility is determined by the number of low-income students attending a college. The SEOG is distributed based on the amount that college was awarded the previous school year. About 90 percent of students who receive Pell Grant funding nationwide also qualify for the SEOG; its termination may mean a significant loss of government aid for over 900,000 students, according to the A.C.E.

    “”It doesn’t matter to me how students are awarded funding, as long as they get it — this Pell Grant increase is not a benefit for students and colleges if the administration takes the funding from other important programs,”” De Anda said. “”You can’t rob Peter to pay Pell.””

    According to De Anda, the U.S. Department of Education has taken an offensive stance in supporting the elimination of the SEOG in order to increase the maximum Pell Grant award, but its aggression will face many obstacles from college officials and student lobbying organizations. The consolidation of the SEOG will have the most negative impact on universities with a low number of students receiving Pell Grants, De Anda said, and since SEOG is a campus-based funding program, universities that could lose the privilege to extra federal financing will actively object to any such change.

    The student loan business is very limited to begin with, and the administration’s proposal to cut federal education funding will have grave consequences for many people, according to Bruns.

    “”The longest the Pell Grant has been flat was three years, until Bush was elected to office in 2000,”” Kantrowitz said. “”He hasn’t been exactly kind to higher education, so this is one step in the right direction — but he needs to take more than just baby steps.””

    Whether Bush’s budget will pass legislation, the Pell Grant program has failed to stay consistent with inflation. In the past 20 years, the maximum Pell Grant award has dropped 23 percent in its ability to cover student tuition fees at public four-year universities.

    Pushing even further beyond the recently passed legislation and Bush’s education bill is Sen. Barack Obama (D-Ill.) and Sen. Edward Kennedy’s (D-Mass.) Higher Education Opportunity through Pell Grant Expansion Act, which proposes increasing the maximum grant to $5,100 until it peaks at $6,300 in 2012.

    “”We need to focus on the students who have financial needs; we need a substantial increase in funding for the neediest low-income students — these students have been neglected for too long,”” Kantrowitz said. “”If we want to keep the United States economy strong, we need to invest in our students because we’re investing in our future.””

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