Call it bad timing: After racking up a $4 billion shortfall due to heavier-than-anticipated student demand in recent years, the Pell Grant program now is running a surplus at the same time Congress is looking for new revenue to shore up the federal budget.
The turn of events is raising an alert among higher education leaders, who want to make sure lawmakers use the savings to expand the program and not spend it on other activities. Despite the added student demand that triggered the shortfall, Pell has not seen an increase in its maximum grant in nearly four years.
"Any surplus should go to increase the maximum grant," says Luke Swarthout, higher education associate at the Public Interest Research Group's Higher Education Project. "The maximum grant has been frozen at $4,050 while college costs continue to rise."
At a recent Senate hearing, lawmakers raised the idea of using this newfound surplus to fund lawmakers' favored projects or to increase federal health care funding--while leaving the maximum Pell Grant alone. Some of higher education's top leaders wasted little time mounting an opposition to such efforts.
"Whenever the student aid programs produce savings, Congress takes them to spend on other areas of government, whether deficit reduction, hurricane relief or other education and health programs," say Drs. David Ward and David Warren, co-chairs of the Student Aid Alliance. "Congress must stop the raid on student aid."
With the surplus, the leaders note, Congress could raise the maximum grant by $260, bringing it to more than $4,300 per year. Such a boost would mean "a much-needed increase for low-income students pursuing their higher education dreams," say Ward, president of the American Council on Education, and Warren, president of the National Association of Independent Colleges and Universities.
In a letter to senators, Ward and Warren say Pell is running a surplus due to an improving economy. During the economic downturn earlier this decade, Pell costs rose as more Americans attended or returned to college rather than trying to navigate a difficult job market.
The debate over Pell comes at a tense time for college lobbyists, since Congress is facing huge obstacles in trying to pass a 2006 education spending bill and a long-term deficit reduction plan. Lawmakers are going back to the drawing board on the spending bill after the full House rejected a compromise between earlier House and Senate proposals. That compromise for the 2006 fiscal year left Pell without an increase in the maximum grant but protected other student aid programs. …