Paying For College: Are Pell Grants On The Way Out?

On both sides of the aisle, people tend to agree that higher education is a path to prosperity for Americans. But deciding how to fund that education has quickly turned this bipartisan topic into a controversial one.

Congress has set April 8th – this Friday – as the deadline for a federal shutdown if the House and Senate can’t negotiate and approve a budget deal. As the shutdown looms, the Pell Grant program is one of the key issues that threatens a budget compromise. Pell Grants are the main source of financing for low-to-moderate income students, and the future of these students’ higher education will be disrupted if Congress can’t agree over how to fund them.

Two proposals to fund the Pell Grant proposal are currently being debated. In February, House Republicans passed a Pell Grant proposal which would cut the current maximum grant for low-income students from its current amount of $5,500 to $4705, a reduction of $845. This roughly $5.7 billion cut from the federal budget would impact 9.4 million students and impact access to higher education for many of our country’s low-income college students. On a state level, California could lose more than $200 million in funds that would normally go to the state because of these grants.

President Obama has threatened to veto this measure and has offered his own proposal. His proposal would maintain the $5,500 maximum Pell Grant amount for college students but would eliminate year-around grants or grants for students to attend summer school, amounting to an $8 billion reduction in the program.

While the two sides debate over how to fund the Pell Grant program, we must keep in mind how costly these proposals could be to our nation’s students, who, without the appropriate education and training, will have fewer opportunities to enrich themselves, their families, our communities and our workforce.
We must continue to develop appropriate mechanisms to fund higher education that provides adequate grant amounts – and, yes, the right kinds of sustainable education debt – for those who may not have the means to a college degree but do have an abundant desire to learn.

Future conversations will need to occur about how to sustain and structurally change the Pell Grant program, which currently costs $36.6 billion. Some options have already been presented, including more strictly evaluating which educational institutions receive funding, depending on how well they prepare students for post-college employment.

In the meantime, EARN continues to show that access to higher education can help low-wage workers and families break barriers to achieving economic prosperity. Most recently, we released a research paper exploring the impact of student loan debt on individuals seeking a higher education. You can read the paper here.

Until next time,

Sheryl Lane
Director of Public Policy

Photo credit: stevendepolo