Republicans propose decreasing funding for Pell grants

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.

“It has certainly increased the pressure on and the need for student financial aid programs,” he said.

If the bill is implemented in its current version, the average award amount for students in North Carolina would drop $659, and about 300 students would become ineligible for Pell grants, said Elizabeth McDuffie, director of grants, training and outreach for the N.C. State Education Assistance Authority.

For the 2008-09 academic year, 14 percent of UNC students received Pell grants. That number increased to 18 percent last year.

For the current academic year, 3,259 students — 22 percent — receive a Pell grant.

“More students are applying and more of them are qualifying for need-based aid,” said Shirley Ort, associate provost and director of scholarships and student aid at UNC. “I’m hopeful that in the end the cuts won’t be as deep as will be discussed early on,” she said.

The proposed legislation would also reduce Pell grant award amounts, and the burden would fall on states to make up the lost funding for students, she said.

“The state has its own budget issues,” McDuffie said. “If the federal Pell goes down, the state will continue to consider what the demands are.”

The bill is expected to pass in the Republican-led House but face opposition in the Democratic U.S. Senate.

The Senate will likely draft its own version of the bill as a compromise, Lackey said.

“At the end of the day, I believe there will be bipartisan support for the Pell grant program,” he said.

“The Pell grant program will continue to receive comparable funding in fiscal year 2011 as it has in years past.”

As legislators are still finalizing a 2011 budget, President Barack Obama unveiled his 2012 budget suggestions Monday.

He proposed maintaining the current maximum Pell grant award at the expense of cutting summer Pell grants and interest-subsidized loans for graduate students.

“We weren’t surprised when we saw the President’s budget come forward,” Ort said.

“They’re trying to mitigate any real harm that would be done by imposing some cuts.”

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