Compromise in Congress funds Pell Grants for now

Thursday, December 23, 2010

A compromise to fund the federal government's operations through the first two months of 2011 turned into a big win for the nation's college students.

But the future of the Pell Grant Program and other higher education grants remains uncertain with talk of deep federal budget cuts ahead. Missouri higher education officials are particularly worried about looming federal funding reductions to the state's needs-based scholarship program.

Averting a standoff, lawmakers reached a deal that will fund the federal government's operations through March 4. Included in the stopgap measure is maximum funding for the needs-based Pell Grant Program. Aid will remain at a top limit of $5,550 per eligible student.

The program had faced a $5.7 billion shortfall for 2011, amounting to a reduction of about $850 per student. With tuition increases a distinct possibility and higher student fees to help pay for a $59 million campuswide renovation campaign, the loss in funding would have been another financial burden for Southeast Missouri State University students who depend on Pell grants.

The program provided more than $32 billion in aid in 2009-2010 and anticipated 8.3 million new awards in 2010, according to the U.S. Department of Education. According to university records, 3,312 Southeast Missouri State students received Pell grants in the 2009-2010 school year, amounting to nearly $12.76 million in financial aid. Grant dollars were up 55 percent from the previous year. To date, 3,395 Southeast students have received Pell funding for the 2010-2011 school year, with nearly $7 million paid out.

An amendment in Congress' short-term continuing resolution fully funds the grant program. For now.

The program faces an $8 billion or higher funding gap in 2012, due in large part to an explosion in need.

"Pell Grant is suffering from its own success," said Justin Draeger, president of the National Association of Student Financial Aid Administrators. "It has been successful in helping families that are disadvantaged, helping them gain access to post-secondary education."

The recession and sluggish recovery have driven displaced workers into or back to class in record numbers. With the influx of eligible students, appropriations for the Pell Grant Program over the past few years have more than doubled, Draeger said.

The student aid program is treated as discretionary spending, so Congress has to project how much spending may be required. The new Congress is pledging deep spending cuts.

More pressing for Missouri higher education is the lack of funding for the Leveraging Educational Assistance Partnership program. The proposed $1.1 trillion federal omnibus spending bill, stalled for now, removes $1.2 million in LEAP student aid, part of the overall Access Missouri need-based scholarship program, according to Leroy Wade, assistant commissioner for financial assistance for the Missouri Department of Higher Education. The federal allocation matches state funds.

With Missouri facing a budget shortfall pegged as high as $700 million, higher education officials like Wade worry about the survival, at least the maintenance, of programs like LEAP.

Access Missouri this year is funded at about $60 million, nearly half of that coming from a bailout from the Missouri Higher Education Loan Authority. Access Missouri is funded at about two-thirds of the previous year's appropriations. Nearly 50,000 students attending Missouri's post-secondary institutions received the scholarship this year.

Wade said the uncertainty about state and federal financial aid is a hardship for students.

"To be an effective financial aid program it needs to be predictable," he said. "When you don't know if the funding is going to be there or what it is going to be, it undermines the decision-making process."


Pertinent address:

One University Plaza, Cape Girardeau, MO

Map of pertinent addresses

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