The Pell Grant program is the most significant financial aid available from the federal government and is depended upon by many college students to make the ends meet when tuition bills come due. The program is supposed to contribute nearly $30 billion to students in 2010 financial aid, but that amount and the overall funding of Pell Grants in the future are on shaky ground as the political and budgetary situation changes in Washington.
The lame duck session of Congress is drawing to a close having extended the current federal budget levels for the next two months. This “stopgap” measure includes funding for the Pell Grant program, meaning students for the upcoming spring semester should still be able to receive adequate funding.
However, the program faces a steep budget deficit next year of nearly $6 billion, with a projected deficit of $8 billion the following year. With the 112th Congress taking office in January determined to enact sharp spending cuts, the Pell Grant program is facing an uncertain future and Congress will need to make a tough decision: whether to cover the budget gap and maintain current grant levels, or withhold funds and allow contributions to students to fall next year.
Earlier this year, Congress passed a law increasing funding for Pell Grants by $36 billion over the next ten years. This raised the maximum grant limit to $5,550 per student from about $4,000 five years ago. The Obama Administration and proponents in Congress have lobbied heavily to win more funds for financial aid programs, Pell Grants in particular. Pell Grants have enjoyed broad bipartisan support for many years; however, the economic climate and the desire to trim government spending means many different programs will face decreased funding in years to come.
The new Congress will begin debating budgetary issues in February when the stopgap measures expire. If the Pell Grant program doesn’t receive extra funding beyond its current appropriation, students could see the contributions from the grants drop by as much as 15%, or $845. Financial aid officers at colleges and universities, in many cases, begin formulating aid packages as early as January for the next school year, and there is great uncertainty over whether the expected Pell Grant contributions will exist in their present form come Fall 2011.
Regardless of the outcome of the current debates over Pell Grants, they continue to be the mainstay of federal financial aid: nearly 9 million students are expected to receive grant money next year, a number which is widely predicted to increase as more of the unemployed return to school.
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