Bush's 2008 Budget Calls For Boost to Pell Grant

By Amit R. Paley
Washington Post Staff Writer
Friday, February 2, 2007

The Bush administration yesterday proposed boosting the nation's main financial aid program for low-income college students by the largest amount in more than three decades, the latest in a flurry of measures this week by Congress and the White House to make higher education more affordable.

The president's 2008 budget, which will be unveiled next week, would increase the annual Pell grant next year by $550, to a maximum of $4,600, Education Secretary Margaret Spellings said yesterday. Grants, unlike student loans, do not need to be repaid.

"As costs skyrocket, it becomes increasingly difficult for middle-class families to afford college," Spelling said in a speech at North Carolina State University in Raleigh. "And for low-income, mostly minority students, college is becoming virtually unattainable. States, institutions and the federal government--we all must increase need-based aid."

Advocates for students hailed the proposed expansion of the Pell grant but cautioned that it would be meaningless if offset by cuts to other federal aid programs in the president's budget. Spellings did not say how the president would pay for the increase.

"We can't be robbing Peter to pay Pell," said Luke Swarthout, an advocate for the U.S. Public Interest Research Group's Higher Education Project. "But this is clearly a step in the right direction on college affordability."

Democratic leaders said the president's plan was a response to their recent moves in Congress to reduce the rising costs of higher education. The House voted Wednesday to increase the maximum Pell grant this year from $4,050 to $4,310; Senate Democrats have proposed raising it immediately to $5,100.

Sen. Edward M. Kennedy (D-Mass.), chairman of the education committee, said he welcomed the change but criticized Bush and fellow Republicans for failing to increase the Pell grant in recent years.

Pell grants, given each year to 5.3 million students with family incomes less than $40,000, have lost much of their buying power in recent years. Twenty years ago, the maximum grant covered about 60 percent of the cost of a four-year public university, but last school year it covered just one-third of that cost, according to the College Board.

Congress is also debating a host of other measures to increase college affordability. The House voted last month to cut interest rates on subsidized loans for students, and the Senate is soon expected to take up a similar measure.

Yesterday, Kennedy and Sen. Richard J. Durbin (D-Ill.) introduced a bill, the Student Loan Sunshine Act, which they said would "protect students and parents from exploitation by private lenders and lenders who offer gifts to colleges as a way to secure loan business."

The measure would ban schools from receiving gifts from private lending companies and require disclosure of financial relationships between higher education institutions and lenders.

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