Bush budget increases Pell grants

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February 23, 2007

2:44 PM

President George W. Bush released his 2008 budget, which includes raising the Pell Grant to $4,600 by 2008 and to $5,400 by 2012. Funding would come partially from the elimination of the Supplemental Educational Opportunity Grant program and two other aid programs. This announcement came soon after the Democratic-held Congress voted to increase the Pell Grant for 2007.

p. Supporters say that the SEOG program is ineffective because most of the funds go to private institutions, not to the colleges that enroll a high number of lower-income students.

p. Some critics disagree with the idea of ending the SEOG program which allocates grants averaging $770 to 1.3 million students. Opponents believe that an increase in Pell grants would not be enough to cover the aid lost by eliminating SEOGs.

p. Terry Hartle of the American Council on Education said that even with increased funding for Academic Competitiveness Grants, the total amount of financial aid awards would decrease from 7.5 million to 6.1 million.

p. “By increasing the size of the Pell grant, needy students are going to have more money,” Robert Archibald, an economics professor at the College, said. “There will probably be students who got a large SEOG who will lose in the exchange, but my bet is that they won’t lose in total because we have to factor in how institutions would react. If students lose some government aid, it is very likely to be replaced by institutional aid.”

p. The Department of Education counters opposition to the change in funding by pointing out that funding will also come from decreasing lender profits. Additionally, the same students who may lose aid from SEOGs will benefit from Pell Grant and Academic Competitiveness Grant increases. The department estimates that 9 percent of current SEOG recipients would lose money, and those students would come from a higher income bracket because they do not qualify for Pell Grants.

p. “When we looked at the numbers, we found that campuses that enroll 70 percent of low-income students only got 40 percent of the SEOG money,” Sara Tucker, under secretary of education, told Insidehighered.com.

p. The Department of Education has also said that the Pell Program is less costly to operate than the SEOG program by a margin of 250:1.

p. Archibald said the elimination of SEOG has an important benefit.

p. “The basic reason is that the simpler the financial aid program is, the more easily it will be understood by the people who might benefit,” he said.

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