Education for all: Pell Grants are necessary for economic stability

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February 21, 2011

11:38 PM

The recent narrative regarding Pell Grants is that they’ve miraculously escaped the sharp-edged, deficit-reducing knife that President Barack Obama used in crafting his budget proposal for the 2012 fiscal year. This idea is misleading in a number of ways; it was neither spared from anything nor was it going to be on good terms for the increasing numbers of financially needy college students. The competing proposals from President Obama and the House Republicans place even greater stress on students who are already burdened by one of the fastest-escalating cost structures in our society — higher education.

The Pell Grant program, which was signed into law in 1965, offers government subsidies for financially disadvantaged undergraduate college students based on their Free Application for Federal Student Aid form.
A small part of the program is compulsorily funded ($690 per grant), while the vast majority is subject to discretionary, yearly Congressional appropriations, the source of our current problems. Because of recent increases in the maximum Pell grant payment and a near-doubling of recipients in the last two years, the program has fallen $20 billion in debt. The commonwealth of Virginia has had one of the fastest payment increases in the country — 77 percent — over this time period.

House Republicans have drafted a proposal that reduces the maximum payment from $5500 to $4700, below 2008 levels. In addition to this, if Republicans make sure that grant payments strictly follow their budget appropriations, 1.7 million fewer students would receive grants next year. The other 7 million annual recipients would also likely see their grant payments decrease. Republicans also plan an end to year-round Pell grants, which included funding for summer school and were instituted in 2008.

President Obama’s budget proposal preserves the current maximum payments at the expense of other affordable education programs. Summer school Pell grants are also removed with this plan, and the government would begin collecting interest on Stafford Loans, a move that could mean $1500 more in annual debt for each of the five million beneficiaries of this program.

All of this comes at a time when the program is stretched thin anyway. Maximum payments had stalled during the Bush years, and whereas the typical grant covered 60 percent of a recipient’s tuition hours in 1990, it now covers less than 30 percent. This comes at a time when financial demand for Pell Grants is substantial across the country. A survey of the most competitive schools in the country found that, on average, 15 percent of these schools’ students received Pell grants. It should be noted, though, that the College of William and Mary falls well below this average at 8 percent.

Most colleges and universities, including our own, are very generous in their merit-based scholarships and other forms of assistance. However, the erosion of the Pell Grant program represents an assault on the nature of college education as a public good. Federally guaranteed subsidies for financially applicable college students have long been recognized as an economic boon for us all. Cutting this program and federal loan programs may save $20 billion this year, but how much will it cost when those 1.7 million people get less lucrative, less tax revenue-providing jobs in the future? What if the goal of stable employment for some of these people becomes unattainable because they lack a college education?

It is at this point that the skeptical reader declares that something must be cut from the budget. I would argue that it is a shame the President and Congress abandon the tough choices regarding Medicare, Medicaid and the military while disingenuously forcing the tough decisions on programs like the Pell Grants.

This comes precisely as President Obama has been calling for increased college graduation rates from the nation’s poor and has said that increased investment in education is critical to laying the groundwork for renewed economic stability. This raises the prominent question: Does anyone see college education becoming more affordable for the nation’s poor and working class?

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