If a Republican effort to reduce federal spending passes through the divided U.S. Congress, students in North Carolina could lose about $166 million in financial aid funding for the upcoming academic year.
The bill, introduced in the U.S. House of Representatives, proposes lowering the maximum Pell grant award from $5,550 to $4,705 and reducing the number of students eligible to receive the grant.
Legislators are trying to make up a projected $20 billion shortfall in funding for the Pell grant program because previous years’ appropriations have underestimated the program’s rising costs.
Pell grants are awarded to needy undergraduate students and do not have to be repaid. Universities calculate financial aid packages based on the funding a student receives from the grant.
A 2009 increase in the maximum award amount, the weakened economy and a growing number of students enrolling in college and qualifying for federal aid have required more funding for Pell grants, said Miles Lackey, director of federal government relations for the UNC system.