This Pell Grant Bombshell Could Make College Even Less Affordable
NEW YORK ( MainStreet) According to the Congressional Budget Office (CBO), the cost of the Pell Grant program has risen dramatically in recent years. The CBO, though, thinks changes could be made to the plan to decrease costs.
Pell Grants are subsidies to low-income students for post-secondary education. Helping the poor, decreasing the income gap and stopping crime are all very prominent political objectives for the Obama administration as well as Congress. Education spending is linked to all of these objectives.
Education has been said to prevent youth from becoming criminals, it has been said to increase earnings, and it has been touted as the road out of poverty. Indeed, education purportedly can solve every societal ill including acne.
Therefore, cutting government spending for a program that helps poor kids go to college is not an image enhancer for an administration that is fumbling foreign policy. A lot of people are going to be upset. The idea of cutting Pell grants will be a third rail politically.
According to the CBO report, spending for the program increased 158% from 20062007 to 20102011, in inflation-adjusted dollars. The current maximum grant is $5,645. During the 2011-2012 period, the most recent award year for which data are available, $33.6 billion in grants were made to some 9.4 million students. Pells are awarded on the basis of financial need and academic course load. They are available for any postsecondary school, whether it be a college or university, a community college or a vo-tech institution.
CBO speculates that the increase in expenditures is the result of several factors including the recession and, just simply, choices made by policymakers to make more people eligible for Pell grants - meanint more money is doled out. Policy changes included larger grants, simpler applications, expanded eligibility and the increased availability of federal aid for online study, according to the CBO.
The purpose of the report was that some "analysts and policymakers" have expressed concerns about the grants' cost to the taxpayer and the procedures of the grants. So it looked at several options that have been proposed to address those concerns. The following were considered:
- Reduce the number of grant recipients
- Reduce the amounts of the grants
- Increase the grant amounts
- Simplify eligibility criteria and the grant application.
Reducing the number of recipients includes restricting "one or more of the major criteria for eligibility, which pertain to financial need, academic readiness for enrollment, academic progress once enrolled and enrollment in a minimum number of credit hours."
The grant amounts could be cut, theorizes CBO, "by reducing the size of all of the grants, either immediately or gradually, or by shrinking the amounts available for particular groups of students. They also believe that to "maximize savings, options that tighten eligibility could be combined with those that reduce the size of grants."