Pell Grant Compromise Maintains Maximum Award, But Cuts 100K Previous Recipients

Jon Christian
December 21, 2011

Congress has reportedly agreed on a compromise federal budget for the coming fiscal year that would preserve the current maximum Pell Grant award—but, it also would tighten restrictions on which low-income college students are eligible for the funding.

The omnibus appropriations bill maintains the current maximum award for Pell recipients at $5,500, but cuts the total number of semesters for which Pell funding is available from 18 to 12. The narrower eligibility criteria will make Pell Grant funding unavailable to about 100,000 current recipients.

In addition, the bill requires students without high school degrees to gain GEDs in order to be eligible for Pell Grant funding.

(Read More About Pell Grant Funding at Campus Progress.)

Critics charge that the changes hit nontraditional students—many of whom take lower numbers of credits for an extended number of semesters—where it hurts.

The Center for Law and Social Policy, an advocacy group for low-income persons, published a critique of the changes to Pell eligibility, arguing that the changes will increase the barriers to low-income students pursuing higher education.

“The bill, simply put, is the wrong direction,” wrote Vickie Choitz, a policy analyst for the organization. “It reduces funding for Pell Grants and workforce investments, in spite of increasing need. And it fails to protect students' eligibility for student aid, creating educational dead ends for the most vulnerable students.”

The Institute for College Access and Success, an advocacy group for higher education access, has argued that [PDF] Pell Grants are a savvy investment during a fragile economy. According to the same organization, the Pell program has also had more surpluses than shortfalls since 1994.

Critics concede that the compromise legislation is an improvement over early drafts of the bill. One key trade off was agreeing to end the grace period for interest due on subsidized student loans.

“Instead of cutting Pell Grants for the lowest-income students, [the Senate] reluctantly proposed to eliminate the interest subsidy on student loans during the six-month grace period before loan repayment begins,” Choitz wrote. “It is less harmful to slightly increase the cost of student loans, which would be very modest, for low- and moderate income students than to significantly reduce grants and/or eliminate eligibility for the lowest-income students.”

The Pell Grant program, named after Rhode Island senator Claiborne Pell, is a form of federal financial aid allotted to low-income students enrolled in undergraduate postsecondary education programs. Improper payments of Pell Grant funds fell by 13 percent in 2011, according to the Office of Management and Budget.

Jon Christian is a staff writer with Campus Progress. Follow him on Twitter @Jon_Christian.

This article was created by Campus Progress. It is reprinted here with permission.