Pell grants have typically been America’s most significant financial aid program for college students, but there is now a $5.7 billion gap in financing for next year’s Pell grants, according to an article in the New York Times. On top of that there is an $8 billion gap for Pell grants in 2011.
Politicians are not sure about the future of Pell grants system in its entirety.
Pressed by a tight budget, Congress finally debated into stopgap financing Friday, December 16 shortly before the budget expired. Temporary measures, extending until February, will likely stay consistent with current budget, not providing any more funding for Pell grants.
Congress had originally planned to increase Pell grant funds, passing legislation this year that provided an additional $36 billion over the next 10 years. Congress also increased the maximum grant to $5,550 from $4,050 five years ago. However, that Congress is now a lame duck, and the mostly new Congress taking over in January is much more determined to cut spending, most likely spending for the Pell grant system.
Many believe the new Congress will not fund the $5.7 billion Pell grant gap, meaning that millions of American students will lose over 15 percent of their Pell grant financial aid, with a maximum financial aid loss of $845.
Future college students won’t have much luck either. This Pell grant program was originally supposed to fund over $30 billion to college students starting in 2011, creating serious concern among financial aid officers across America.
Many current and future students depend on that Pell grant money to finance their college educations. This news is making parents, students and financial aid officers begin to wonder where the extra cash is going to come from.
Enhancing and strengthening the American education system has been one of the Obama administration’s major goals, ranging from grade school up through college. Likewise, the Obama administration had originally planned to increase the spending for Pell grants.
However, the recent recession has increased unemployment and sent millions of students of all ages back to college; both groups have received Pell grants. The government then overspent its funding, distributing more Pell grants than originally intended, creating the current gap in the Pell grant fund.
Education administrators estimate that their will be 8.7 million Pell grant recipients next year, assuming the program maintains a funding of about $34 billion. This leaves congress with two options – add $5.7 billion to maintain the Pell grant fund or let it fall completely.
Others have blamed Congress, claiming it needs to live up to its promised $5,550 maximum Pell grant for students starting in the fall of 2011.
If the program is cut, the total cost of college (tuition subtracted by financial aid) will absolutely soar, leaving students with significantly less financial aid to offset the rising costs of college tuition.