NEWS

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February 13, 2007

Pell Grant awards set to increase

The maximum Pell Grant award available to low-income undergraduates could increase under a recently passed spending bill in the U.S. House of Representatives. The proposal, which gained House approval on January 31, would increase the amount available per student by $260—from the current $4,050 to $4,310 a year. The grant, which does not need to be repaid, has not been increased since 2003.

According to Alicia Reyes, director of the Office of Financial Aid, approximately 535 students at the University of Chicago are currently receiving Pell Grants and would potentially be affected by the legislation. Reyes noted that the average Pell Grant is about $2,700.

President Bush has also proposed a further increase for Pell Grants in his 2008 budget proposal. He is asking for the maximum award to be raised to $4,600 next year, and to $5,400 within the next five years. In a recent speech, Secretary of Education Margaret Spelling said the plan was “the biggest increase to the Pell program in over 30 years.”

To pay for this increase, however, Bush is considering eliminating the Federal Supplemental Educational Opportunity Grant (FSEOG). Like the Pell Grant, the FSEOG is a program designed for low-income students and also provides funding that does not need to be repaid. Even with the Pell Grant increase, the program’s elimination could put individual students at a disadvantage.

According to Reyes, about 490 of the Pell Grant recipients at the University currently receive FSEOG money totaling approximately $1.5 million. “The increase to the Federal Pell Grant program and the elimination of the FSEOG program means that our students would receive approximately $1.3 million less in federal grants than they currently receive,” she said.

Students potentially affected by the legislation downplayed the potential gains and losses.

“It’s not really that big of an issue because the way they do the financial aid package here, if the government didn’t give the money, then the University probably would,” said fourth-year Pell Grant recipient Katie Simon. “But I think that it is important that our government recognizes the rising costs of education. It’s nice [that they raised the maximum,]” Simon added. “I’m very thankful for our financial aid.”

Should the Bush budget proposal pass, the University will attempt to alleviate the expected shortage in funding. “Based on current financial aid practice, the University will explore ways to replace the ‘lost’ federal funds,” Reyes said.

It is unclear how Congress plans to pay for the proposed $260 increase, although the one-year moratorium on earmarks that Democratic leaders imposed in December 2006 is expected to contribute.

The House bill passed with the support of 229 Democrats and 57 Republicans.