Changes in Funding for Higher Ed

The Pell Grant program recently saw a boost from the American Recovery and Reinvestment Act (ARRA), and may undergo more changes with President Obama’s proposed 2010 budget. Following, we’ll examine the increase in funds for the program from the $787B stimulus bill and how the program will look according to the proposed 2010 Budget.

The Pell Grant program was put in place through the Higher Education Act of 1965 in an effort to increase the number of low-income students attending post-secondary institutions. Students must demonstrate significant need to qualify for a Pell Grant, with the amount awarded derived from information provided by the FAFSA form. The 2007-2008 Federal Pell Grant End-of-Year Report states more than 5.5M students received Pell Grants.

One of the main issues in the past with the Pell Grant program is the availability of funds to match not only inflation, but also the rising costs of tuition. Each year Congress approves the amount of funding going to the program, which resulted in a four-year freeze in the maximum award. From 2003 to 2007 the maximum Pell Grant award was $4,050. At its inception, the grant covered around 70 percent of tuition costs; it now covers around 30 percent.

The Stimulus Boost
Of the $90.9B included in the ARRA, $30.8B was set aside for higher education with $17B to be used “to close the shortfall in the Pell Grant program and boost grant amounts by $500 to $5,300 in the first year,” according to a Department of Education press release.

The ARRA also stipulates that the maximum Pell Grant award will go up next year. The increase in the maximum award could help an estimated seven million people access higher education.

Change to Come With the 2010 Budget
President Obama’s proposed 2010 budget would make funding for the Pell Grant program mandatory, eliminating funding issues for the program. The program’s funding would keep pace with cost of living increases by being indexed to the consumer price index plus one percent. The maximum grant award for the 2010-11 academic year would then be increased to $5,500.

The Pell Grant program isn’t the only program to see changes with the proposed 2010 budget — the student-lending program is also expected to see restructuring. Taxpayers could see $4B a year in savings if the federal government directly provides loans to students. The Office of Management and Budget estimates a 10-year savings of $41B for the government if all federal student lending falls under the Direct Loan Program. Private loan companies could still collect loans and provide other services through performance-based contracts with the Department of Education.

These changes and others to higher education funding would help increase access to education for low-income students, especially those seeking post-secondary education at community colleges or in vocational schools.

The Department of Education also emphasizes students using grants over loans, so changes to the Pell Grant program might make students more aware of the choices they have for funding higher education. While the amount awarded through the program is based on need, students can use the money for other education-related expenses besides tuition, making the program a good option for students, especially during this tough economic period.




Featured

  • AP Construction Breaks Ground on Two Projects for Austin ISD

    Adolfson & Peterson Construction (AP) recently announced that it has broken ground on two renovation projects for the Austin Independent School District, according to a news release. The work at McCallum and Anderson High Schools totals 97,350 square feet and is scheduled for completion in January 2027.

  • Tufts University Breaks Ground on Two New Residence Halls

    Tufts University in Medford, Mass., recently broke ground on two new residence halls with a total capacity of 664 beds, according to local news. The project’s ultimate goal is to expand on-campus housing and reduce pressure on the local housing market.

  • Los Angeles City College Breaks Ground on New Administration, Workforce Building

    Los Angeles City College (LACC) in Los Angeles, Calif., recently broke ground on a new $72-million administrative facility, according to a news release. The Cesar Chavez Administration and Workforce Building will stand four stories, cover 67,230 square feet, and play home to a wide variety of the school’s educational and administrative services.

  • New Kent State Academic Building Earns LEED Silver Certification

    Kent State University in Kent, Ohio, recently announced that its newest academic building, Crawford Hall, has earned a LEED Silver certification from the U.S. Green Building Council, according to a news release. The facility was recognized for its innovative design, water conservation technologies, energy-efficient systems, and sustainable construction materials, among other features.