Pell Grant cuts won’t affect aid

March 3, 2011, 2:02 a.m.

Federal funding for Pell Grants may decrease significantly if the Senate also passes the H.R.1 bill recently passed by the House of Representatives. Stanford’s Financial Aid Office is confident that these proposed cuts, if enacted, would have a limited impact on the University’s need-based financial aid policy.

Pell Grant cuts won’t affect aid
(ANASTASIA YEE/The Stanford Daily)

The Pell Grant program helps low- to middle-income undergraduates pay for college and also provides funding for working low-income adults who want to return to school to specialize in certain interests and skills.

Under the proposed H.R.1 bill, the Pell Grant program could face a 24 percent reduction, totaling $5.7 billion, which leaves each student with $4,015 instead of $4,860 in grant money.

According to the Center on Budget Policies and Priorities (CBPP), one of the country’s leading policy organizations on legislation affecting low-income families, H.R.1’s stipulations could be detrimental to the demographic they affect.

The Pell Grant is unique in that it consists of two different types of funding, mandatory and discretionary. The former is a legal guarantee that each student will receive $690 annually to help finance his or her education. But the bulk of Pell Grants are funded by discretionary means; an annual appropriation bill essentially allows the government to spend money to support these grants.

Cuts are, for the most part, directed at the latter. However, the CBPP claims that H.R.1 threatens to eliminate the mandatory component altogether by 2014.

“Proponents of cuts in assistance to lower-income individuals and families often claim that America should strive to achieve equality in opportunities rather than equality in outcomes,” according to the CBPP website. “Cuts in programs like this, which help provide improved opportunities for success in school and work to otherwise-qualified disadvantaged young people, make a mockery of such claims.”

According to CBPP research, downsizing the discretionary awards could lead to $64 billion in cuts in mandatory funding for Pell Grants in the next 10 years.

Representatives for the CBPP declined to comment to The Daily on the issue.

Stanford’s director of financial aid, Karen Cooper, does not believe the decision on Pell Grants will have a significant effect on the University’s financial aid policies.

“The Pell Grant program is very helpful to us and makes a difference in our overall budget,” Cooper said. “If it’s a short-term change, we should be able to absorb that with institutional funds…in the long run we may need to expect a little bit more of all of our students before we take in Stanford scholarship funds.”

Each Stanford student’s total financial aid award is determined by calculating both parent and student contributions as well as awards and scholarships that make up the difference. Cooper indicated that cuts to the Pell Grant program might require increased student loans.

Still, Cooper remains optimistic.

“For the last four or five years, we’ve been expanding our financial aid pool, even during the economic recession,” she said. “Even though endowment has reduced, the University remains committed to need-based financial aid. Money gets taken away from other things to keep our financial aid program whole.”

Cooper indicated that programs like The Stanford Fund (TSF) have been helpful in bridging financial aid gaps. In the past, about half of the money from TSF has gone to providing scholarships. This year, the number increased to 75 percent due to a decline in endowment funds.

“Stanford re-prioritizes funding to make sure the University meets the expectations of its students,” Cooper said.


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