Potential Cuts to Pell Grant Could Affect Students in 2011
Katy Hopkins

More than 9 million students may receive less federal funding this fall

Antoine Hamilton, a 27-year-old Wisconsin resident, makes his financial ends meet -- just barely. A student at the Art Institute of Wisconsin, Hamilton works two jobs as a stylist and a resident care technician and claims he lives paycheck to paycheck while paying tuition bills. He also receives the maximum federal Pell Grant, $5,550 an academic year, to help finance the bachelor's degree he hopes to complete by the time he's 30.

"I feel like our economy right now is not good, so a lot of people are actually getting their minds right and trying to go back to school and go into those fields that will help them have a better life," says Hamilton, who took several years off between high school and college.

Now, Hamilton is one of millions of financially needy college students across the country who may see a decrease in one component of their financial aid packages in 2011, if a bill passed by the U.S. House of Representatives makes it through Senate deliberation and is approved by President Obama -- a notion that Hamilton says makes him "feel devastated."

"Because I would not be able to pay for my education, I won't meet the graduation requirements in three years," Hamilton explains. "I believe I would just lose interest in school and go back to work, and then where would I be? I would just be working, or I would probably be poor. I wouldn't be able to meet the expectation I have for my goal to be successful in my career."

The Pell Grant Program, widely considered to be the backbone of financial aid to the country's most needy students, was subject to a decrease in funding as part of a Continuing Resolution (H.R. 1), which cleared the House last month and cut about $60 billion from the federal budget. Lawmakers levied a $5.7 billion cut to the Pell Grant Program, which grants aid to low- and moderate-income students based on a formula that considers annual income and school cost, among other factors. The changes would take effect for the 2011-12 school year, decreasing the maximum amount of aid for the most needy students from $5,550 to $4,705, a difference of $845. Plus, about 1.7 million students who receive smaller Pell Grants would become ineligible for the program.

Approval of the cuts is far from guaranteed, since the Pell Grant Program has long received bipartisan support in the Senate. But the House's cut represents a struggling economy's fix to a program that was "absolutely" unsustainable, according to Rep. Virginia Foxx, a Republican from North Carolina who chairs the Congressional Subcommittee on Higher Education and Workforce Training. "It's hardly a devastating cut when you are cutting such a small amount," she says, citing a sharp rise in the program's cost over the last few years. "We're cutting entire programs in lots of cases."

The Pell Grant Program was injected with about $17 billion over two years as part of the American Recovery and Reinvestment Act of 2009, but the extra money did not match the needs of the skyrocketing numbers of students enrolling in college and qualifying for aid through the recession. (About 27 percent of U.S. college students currently receive some amount of Pell funding.) This confluence of events has put pressure on the long-term sustainability of the program, says Justin Draeger, president of the National Association of Student Financial Aid Administrators. The program, which was fully funded for 2011-12 before H.R. 1 was passed in the House, will face a budget shortfall of about $20 billion in 2012 if no long-term changes are made.

President Obama has proposed several cuts that would take effect in 2012, including an end to the year-round grant that allows students who take summer courses to collect two Pells in one year. In his proposal, the maximum grant would remain at $5,550, a contrast to the House bill that lowered the maximum grant award. H.R. 1 would also provide Pell funding to fewer students, which may address what Rep. Foxx says was the intent of the original Pell Grant legislation.

"Pell Grants were to be for the most needy students -- most needy students," Foxx stressed. "The poverty rate in this country is about 15 percent right now; 27 percent of all college students are getting Pell Grants. It appears to me that the program has gone way beyond its scope."

But it is these most needy students, advocates of full Pell Grant funding for 2011-12 say, who would be in most jeopardy if the House bill is approved, since H.R. 1 lowers the maximum amount of funding for the lowest-income students by about $800.

"These are the students...who are already receiving quite a bit of loans to the point where a lot of students can't just pick up $845 working an extra shift at their work or getting another loan," says Rich Williams, higher education advocate at the U.S. Public Interest Research Group, a nonprofit, non-partisan organization. "These students tend to be maxed out in everything."

While full-funding proponents such as Williams acknowledge the program faces long-term sustainability issues, some contend that cuts for the 2011-12 school year are ill timed. By law, the U.S. Department of Education published federal funding tables for financial aid administrators on Feb. 1, indicating that Congressional funding was adequate to sustain the Pell Grant Program at last year's rates. Because financial aid advisers have had more than a month to deliver aid offers to future students, the House cuts, if approved by the Senate, could muddle the plans of financial aid offices across the country.

"We are in the middle of developing packages for students who have been admitted," says the University of Southern California's Executive Director of Financial Aid Thomas McWhorter. "We strive to have a package to them in April so they have a full month to decide. It's extremely important that we have the right information when we are telling families what to expect in their package."

Cuts to the Pell Grant Program could also put a strain on families who depend on the grant for financial assistance. For the Hoebbel family, the Pell Grant is just a "fraction" of the resources used to send Chris, a sophomore at Alfred University, to college, his father Tom says, but it remains a crucial component of the financial aid package. "It would be a big impact," Hoebbel says of a decrease in his son's Pell Grant. "We're at the point where even with all the grants, financial aid, and loans, we still have a balance at the end. Any cuts in any of these grants [means] either a bigger loan or more money out of pocket -- which we don't have a lot of."

But in the event that Pell Grant students lose some of their federal funding, officials surveyed stressed that there are other means students can use to finance their education. USC's McWhorter says his office would use other university need-based aid to fill gaps left by a smaller Pell Grant. Rep. Foxx, former president of Maryland Community College, recommends seeking out part-time jobs and additional scholarships from schools that otherwise would go unused.

Angela Isom, who counsels about 400 low-income high school students in Ohio through the college application process, says the proposed cuts challenge her to be honest with needy students about loan debt, but that the risk of less federal funding shouldn't deter an informed student's pursuit of higher education.

"I do think it's sad that students who were looking to that for a chance [may] now have to graduate with significantly more loans than previously in history," says Isom, who went to school with the help of a Pell Grant. "Overall, it [would be] a significant cut, but it's not worth not attending college."

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