Pell Grant Program Projected to See $7.8 Billion Surplus Next Year
Expecting fight for the funds, two Democrats push to keep the money for students
The Pell Grant program, a federal financial aid offering earmarked for the neediest college students, is expected to have a $7.8 billion surplus next year. The fight is on to claim that money.
Reps. Robert Scott (D., Va.) and Rubén Hinojosa (D., Texas) sent a letter Thursday urging leaders of the Senate and House appropriations subcommittees that deal with education and human services to keep the funds in the Pell program for fiscal 2017.
“We are concerned there will be proposals to raid Pell to address other” funding needs, Messrs. Scott and Hinojosa wrote.
They said those needs should be met through other resource allocations, “rather than on the backs of college students.”
The congressmen are trying to act pre-emptively, according to a spokeswoman from the House Committee on Education and the Workforce, as discussion builds in Washington that appropriations representatives in the Senate may try to move funds to other priorities. Mr. Scott is the ranking member on that House committee.
In March, the Congressional Budget Office updated its Pell funding expectations, projecting a temporary $7.8 billion in surplus balances for the roughly $30 billion program because of lower-than-expected program costs.
The government hasn’t doled out as much money as anticipated because college enrollments have declined slightly and fewer students qualify for the aid as their families continue to recover from the recession, according to Robert Kelchen, an assistant professor of higher education at Seton Hall University.
Messrs. Scott and Hinojosa called Thursday to increase maximum Pell disbursements to $6,055 a student for the 2017-18 academic year, up from the $5,815 cap already set for the 2016-17 year. They estimate that the increased maximum would cover about two-thirds of the average price of in-state tuition and fees at a four-year institution.
While student loans must be repaid, students aren’t on the hook for grant funds—even if they withdraw from school before graduation.
Pell funds often cover a fraction of tuition costs, but there have been cases of students at lower-priced institutions abusing their Pell disbursements by spending the money on other expenses without ever intending to complete their courses.
Messrs. Scott and Hinojosa also encouraged appropriations subcommittee leaders to allow students to receive Pell funds year-round, not just during the traditional academic year.
Proponents on both sides of the aisle say resuming year-round disbursements—a feature that was cut in 2011 to save overall Pell maximum payouts—would allow some students tospeed up their educational pursuits by having tuition costs covered for summer courses.
The White House has recommended a return to year-round Pell Grants, as well as a $300 annual bonus for grant recipients who take at least 15 credits a semester, an attempt to encourage on-time graduation. And Sen. Lamar Alexander (R., Tenn.), chairman of the Senate Committee on Health, Education, Labor and Pensions, has thrown his support behind year-round Pell as well.
A representative for Sen. Roy Blunt (R., Mo.) chairman of the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, said Thursday afternoon that the senator hadn’t yet received the letter.
Sen. Patty Murray (D., Wash.), ranking member of the subcommittee, “is very focused on strengthening the program and expanding access to the opportunities these grants offer to students across the country,” according to a statement provided by an aide.
Rep. Rosa DeLauro (D., Conn.), the ranking member of the House’s corresponding appropriations subcommittee, said she supports using the Pell surplus “for students in need who otherwise might not be able to attend college” and welcomes the suggestions of Messrs. Scott and Hinojosa.
Rep. Tom Cole (R., Okla.), chairman of the subcommittee, wasn’t immediately available for comment.
Some economists warn that increasing grant aid for low-income students could make college more costly, not less.
A July 2015 Federal Reserve Bank of New York report found that rising government aid may actually perpetuate soaring tuition prices. Schools know students have easy access to funds—both grants and loans—and so continue to raise their rates accordingly, regardless of inflationary needs, the report said. The Fed study found that for every $1 increase in Pell grant caps, published tuition rose by 40 cents; for subsidized loan increases, tuition rose by 60 cents on the dollar.
The Senate subcommittee is expected to mark up appropriations bills next week.
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