Washington trims Pell Grants: How will students pay fall tuition?

As students plan ahead for college next fall, it’s hard to know exactly how much aid they’ll receive.

The size of Pell Grants for millions of low- to moderate-income college students will be determined by the ongoing budget fight in Washington. The current stopgap resolution expires March 4, and the House passed a proposal Feb. 19 that, among cuts in other areas, would reduce Pell Grants by $5.7 billion for this fall. [Editor's note: The original version of this paragraph and the subhead above said $61 billion, which is the total amount of funding the entire budget bill cut.]

That would cut the average grant by $785, and would bring down the maximum grant by $845 dollars to $4,705.

The Senate hasn’t acted yet, and there’s talk of a government shutdown if Congress can’t cobble together a spending compromise.

But colleges have already started telling students how much aid they’ll receive, based on figures published Feb. 1 – as required by law – by the US Department of Education.

“Students and parents are in a very tough position right now. [They’re] being asked to make decisions based on financial aid information that might change,” says Justin Draeger, president of the National Association of Student Financial Aid Administrators.

Students who depend on the grants should lobby the Senate to sustain full funding, says a new Facebook campaign, jointly organized by Mr. Draeger’s financial aid group, the US Student Association, and the US Public Interest Research Group. They worry that some students will put their college plans on hold, or will have to switch to a cheaper school, because of the uncertainty.

“Not many people in my area get the chance to go to college,” Lisa Drudy, a third-year college student in Tennessee, writes on the Facebook page. “I had just enough to get by, even resorting to a private loan. My family cannot afford to help me any more than they already have.”

But many Republicans in Congress argue that even popular programs have to take a hit, to rein in unmanageable levels of government spending.

The Pell Grant program is “on an unsustainable course – it’s heading toward bankruptcy, and we need to make tough choices to make sure it continues to serve the students that need it most,” says Brian Newell, spokesman for Rep. John Kline (R) of Minnesota, chair of the House’s Education & the Workforce Committee.

The Obama administration acknowledges that, on its current course, the program is heading toward a $20 billion shortfall by the end of 2012, because the number of eligible students enrolling in college has been dramatically increasing.

But President Obama sees Pell Grants as an investment in the future, and wants to make minor adjustments in student aid to save money, rather than cut the maximum Pell Grant. His proposed budget for fiscal year 2012 would take away grants used for college courses in the summer and would reduce loan subsidies for graduate students.

There’s plenty of room for cuts to Pell Grants, says Lindsey Burke, an education policy analyst at the conservative Heritage Foundation in Washington. Pell Grant funding has been going up for a long time, she says, and even doubled in the past few years.

Despite that, “it has done nothing to mitigate the college-cost problem, which is really the issue” for low-income students, she says.

By increasing federal subsidies and grants, the government relieves the pressure universities would otherwise face to use resources efficiently and lower their costs, Ms. Burke adds.

Some higher education observers are optimistic about Pell Grants being maintained for this fall. Because students are already being told the amounts of their grants, “the longer this goes on, the harder it becomes for Congress to retroactively go back in and take money away that has been promised to them,” says Terry Hartle, a senior vice president at the American Council on Education in Washington.

But as more and more stories come out about possible cuts to aid at both the federal level and in cash-strapped states, the cumulative effect could be to discourage low-income students from attending college, he and others say.