Low-income students might be able to receive more Pell Grant money under a U.S. Senate proposal that passed March 11.
Sen. Norm Coleman, R-Minn., sponsored the plan – part of a larger Senate budget bill – which would increase the maximum Pell Grant amount by $450, through spending decreases on other noneducational federal programs.
At the University, where approximately 4,500 students receive Pell Grants and 1,744 of those students qualified for the maximum award last year, financial aid officials have mixed feelings about the plan.
“I think it would be a good idea to increase the amount that students can get for Pell Grants,” Kris Wright, director of the Office of Student Finance, said. “But I think it’s going to be very difficult, given other budget constraints, for Congress to, in fact, fund that increase.”
Tom Steward, communications director for Coleman’s office, said the money for the grants would come from 0.26 percent across-the-board cuts of federal programs that are not related to education.
“(Coleman) is a great believer that education is a great equalizer and opens doors to everyone, and he wants to make sure that door is open to all Americans who need that assistance,” Steward said.
Larry Bloom, manager of the University’s undergraduate services, said it would be more sensible for legislators to give separate funding for Pell Grants than to take the money from other programs.
“You hate to rob Peter to pay Paul,” Bloom said. “You hate to take the money from one good program to put it in another.”
Bloom said Pell Grants are simple to fund and administer because students do not have to pay them back, which saves money on administrative costs.
He compared Pell Grants to consolidated loans, which allow students to pay back money at the same rate of interest as when they took out the loans. If the interest rate was 3 percent when students took out their loans and 8 percent when they paid them back, Congress must be prepared to fund the difference in interest rates, Bloom said.
National higher-education officials also said they were skeptical of using money from other programs to increase Pell Grants.
“That’s something that we always have an issue with,” said Marty Guthrie, director of governmental affairs at the National Association of Student Financial Aid Administrators. “Despite the fact that we are certainly eager to increase the maximum Pell Grant award, it is problematic to take funds from another program for that purpose.”
The U.S. House of Representatives began work on its version of the budget bill Monday, said John Engelen, University federal relations director. Since Coleman’s plan has not yet passed the House, it is not yet a certainty, he said.
“The Coleman amendment is but the first step in this process,” Engelen said.
A similar proposal in the Senate was defeated on the same day Coleman’s plan passed.
That plan, submitted by Sen. Edward Kennedy, D-Mass., would have increased the maximum Pell Grant amount by $1,050 and would have been funded by closing a number of tax loopholes. Kennedy’s plan was voted down 44 to 53 on a roll-call vote.
