The Washington PostDemocracy Dies in Darkness

Pell Grant award to rise, but program reserves remain in jeopardy

The Senate appropriations committee approved a 2018 spending bill Thursday that would increase the maximum award provided to low-income college students through the federal Pell Grant but subsequently sap billions of dollars out of the program’s reserves.

House Republicans at odds with Trump’s proposed higher education cuts

Pell remains the primary source of federal grant aid for millions of students whose families typically earn less than $60,000 a year, but the purchasing power of the grant has waned in the face of rising college costs. Student advocates have been urging Congress to renew the grant’s annual inflation adjustment before it expires this year, but in lieu of an extension, lawmakers bumped up the award by $100, to $6,020 for the 2018-2019 academic year.

Still, the Senate bill would pull out $2.6 billion in reserve funds from the program on top of the $1.3 billion cut sustained in the fiscal 2017 budget agreement. The reduction is lower than the $3.3 billion rescission in the House bill, which also sought to freeze the maximum award. While advocacy groups praised the Senate for the additional award money, many say raiding the reserves could jeopardize the grant program in the future.

“Even with the increase … the maximum Pell Grant will still cover the smallest share of the cost of attending a public four-year college in more than 40 years,” said Jessica Thompson, policy and research director at the Institute for College Access & Success. “Any proposal to cut the Pell Grants is out of step with the goal of growing an educated, competitive workforce.”

Feds kick off restoration of grant aid for students burned by for-profit college closures

Through the first three months of this year, the Education Department said the $30 billion Pell program benefited more than 5 million college students. Nearly two-thirds of African American undergraduates receive Pell funding, as do 51 percent of Latino undergrads, according to the Education Trust.

The program has been running a $10 billion surplus that higher education experts say should be used to ward off potential discretionary funding cuts in the future and provide awards throughout the school year to speed up graduation. President Trump, however, wants to use more than half of that reserve to increase defense spending and reduce the Education Department’s overall budget. Though congressional Republicans and Democrats refused to withdraw that much money from the program, they have still reduced the reserves.

Despite her disappointment with the Senate plan to draw down Pell funds, Thompson commended lawmakers for agreeing to restore Pell eligibility for students who were defrauded by their colleges. The provision in the bill expands on the Education Department’s decision to restore grant eligibility to students whose colleges closed before they could complete their degrees.

Pell is available only for six years or 12 semesters. Let’s say a student pursuing a bachelor’s degree uses three years’ worth of that aid before his college closes. If that student is unable to transfer his credits and has to start over somewhere else, he would not have enough Pell money left to cover the degree. Thousands of students affected by the closures of ITT Technical Institutes and Corinthian Colleges have found themselves in that position.

Feds kick off restoration of grant aid for students burned by for-profit college closures

Last fall, Sen. Patty Murray (D-Wash.), the ranking member on the Senate Health, Education, Labor and Pensions Committee, found a provision in the Higher Education Act that gives the Education Department authority to grant students additional aid, clearing the way for the restoration.

Want to read more about Pell grants? Check out:

Needy college students have a good chance of getting government grants to take summer classes … again

An increasing number of low-income college students have no financial cushion

House Republicans want to cut back grants for poor college students