Bill aims to boost funding for Pell Grants by $40 billion
Moving forward on hispledge to transform America into the most educated country in the world by 2020, President Barack Obama hopes to pump an additional $40 billion into the Pell Grant program over the next decade.
This money is tied up in a bill that has already been passed by the House and, starting in 2011, would rise with the consumer price index, plus one percentage point.
This funding, however, will likely not be able to offset rapidly increasing tuition costs.
“We have no authority over how colleges set their tuition—there is no law—so all we can do at the federal level is try to help,” said Jane Glickman, a spokeswoman for the Department of Education.
Just decades ago, Pell Grants covered two-thirds of tuitions and fees for a four-year public institution. They currently cover about one-third of the costs.
With the maximum Pell Grant set to be about $6,900 in 2019, this increase would cover just a small fraction of tuition and fees for a private institution.
Although the $40 billion is still undergoing debate on Capitol Hill, Glickman said it would be considered a massive increase in Pell Grant funding.
The current maximum Pell Grant is $5,550, and in fiscal 2009 approximately $25 billion is slated for Pell Grants.
With this increase, more students would be able to qualify to receive Pell Grants—especially students from middle-class families.
This multi-billion dollar increase in education funding is contingent upon the Senate passing this bill. The bill would end a federal program that subsidizes private lenders who provide federally guaranteed student loans.
Essentially, the government would be cutting out the middlemen and directly lending to students.
Pedro de la Torre, advocacy senior associate for nonprofit think tank Campus Progress, said direct government lending is more effective than private lenders because it is “less confusing, there is less corruption, and it’s more efficient.”
The lending overhaul would save the federal government an estimated $80 billion over 10 years for education.
Half of that—or $40 billion—would go to Pell Grants.
The House passed the bill in mid-September in a 253 to 171 vote that fell largely along party lines.
With conservatives wielding more power in the Senate, the voting is expected to be more contentious in that chamber.
“Hopefully some conservatives can get past the notion that the government will be doing more and private industry will be doing less,” de la Torre said. “This should be a win-win for everyone.”
But de la Torre expressed optimism that the bill will pass and said students need to make their voices heard and become active in the process of getting the bill passed.
“Students need to be really active so it doesn’t get watered down,” de la Torre said. “It will be an uphill battle.”
The bill will help student aid programs finally serve the interests of students and alleviate difficulties in paying for college, said Melissa Salmanowitz, spokeswoman for the House Education and Labor Committee.
“This legislation makes important and historic investments to help make college affordable and accessible for all eligible students,” Salmanowitz said. “It will help us transform our student aid programs so that they finally operate in the best interests of students—not banks—and help relieve the burdens of overwhelming debt.”
The bill is expected to reach the Senate floor after the health-care bill debate calm down—definitely before the year ends, de la Torre said.
“Hopefully this creates a floor not a feeling for Pell Grant increases in the future,” de la Torre said.