Modest gains for Pell Grant: an increase in the grant amount will give more money to those eligible

University Business, Feb, 2005

At the close of 2004, Congress passed an eleventh-hour change to the Pell Grant funding formula. Specifically, lawmakers gave the OK to update the state tax tables that help define the tower-income students who are eligible to receive Pell Grants.

The widely reported result is that an estimated 90,000 students will no longer be eligible to receive Pell Grants and another 1.3 million will receive $100 to $300 less. Such cuts were necessary to make up for a budget shortfall in the Pell Grant program, legislators said.

Still, President Bush, who supported the changes, has countered his critics by pointing out that the total budget allocation for Pell in the fiscal 2005-06 year is a record $12.4 billion. A total 5 million low-income students will receive Pell Grants this year.

And white fewer students will be getting grants, those still in the program have a chance to receive more money.

In a January speech from Florida Community College at Jacksonville, Bush promised to increase the maximum Pell award by $100 each year for the next five years. The current $4,150 maximum award will climb to $4,550 by 2010. In addition, Bush wants to expand loan forgiveness to students who teach math, science, and special education.

The increase is a move in the right direction, says Rep. George Miller (D-Calif.), the senior Democrat on the House Education and the Workforce Committee, but it stilt isn't adequate. "Even President Bush knows that a $500 boost over five years is not enough--he promised in 2000 that he would raise Pell by more than twice that amount."

In his remarks, Bush also hinted at a coming shakeup of financial aid programs. Without giving details, Bush added that he intends to ask Congress to reform the student loan program to make it more efficient.

Pell Grant

2005
Maximum Grant   Maximum Grant
$4,150          $4,550

The Pell Grant program provides a total of $12.4 billion to
more than 5 million undergraduate students. They currently
receive grants that range from $400 to $4,150.