Don’t count the Pell Grant increase Congress approved last week as money in the bank.
Students expecting to receive a $50 increase in their Pell Grant for fall semester will be disappointed to learn that the recently approved increase is merely a safety measure taken by Congress to ensure the amount granted to recipients does not decrease after a mandatory across-the-board budget cut.
“College costs, I’m sure, are going to continue to rise and students who rely on financial aid to pay for college will have to take out loans or pursue other types of grants,” said Robert Boone, director of Financial Aid for The University of Memphis.
Congress gave final approval last week to a spending plan for the 2003 fiscal year, already four months underway, that is more generous to federal student aid than the Bush administration had hoped.
Although the White House had threatened to veto legislation that would increase the maximum Pell Grant above its current level of $4,000 per student, the final spending package adds $50 to the maximum, bringing the total to $4,050 per student.
Last month, the Senate approved a version of the spending bill that would have increased the maximum Pell Grant to $4,100. But before the Senate completed work on the bill, the White House’s Office of Management and Budget released a statement complaining that the legislation would raise “the Pell Grant maximum without providing sufficient funding.”
The spending increases in programs throughout the budget, however, will be shaved a little because Congress included a provision in the budget package that would cut the specified amount for each program in the new spending plan by 0.65 percent.
The shortfall, which results from unexpected growth in demand for the grants over the last couple of years, is projected to be approximately $2 billion. Because the Pell Grant functions like an entitlement program, grants are typically awarded to eligible students even if the program suffers occasional deficits.
Lawmakers included the increase to ensure that the total cost of the budget for fiscal year 2003 remained at the level supported by President Bush, who has threatened to veto any proposal that went over budget.
Some experts say the increases in the budget are aimed at keeping various programs from suffering small reductions after the final across-the-board cuts.
“In effect, the increase in the Pell Grant program is geared more toward covering the amount of the mandated budget cut than giving recipients more money to fund the rising cost of post-secondary education,” said Patricia Smith, director of federal-policy analysis for the American Association of State Colleges and Universities.
Although President Bush asked Congress this month to keep the maximum Pell Grant at its current level through fiscal year 2004, the House and Senate passed the new bill by a vote of 338 - 83 and 76 - 20, respectively. The President is expected to sign the legislation into law soon.
