Pell Grant growth
More students and families are using the federal Pell Grant to pay for college. This is because of growth in the program under President Barack Obama as well as rising college enrollments and more families meeting the financial requirements because of the recession. This growth can be seen at the University of Georgia, the state’s flagship campus and its largest public university.
Academic year … Total undergrad enrollment … Pell recipients … Percentage
2007-08 … 25,335 … 3,319 … 13.1%
2008-09 … 25,467 … 3,950 … 15.5%
2009-10 … 26,142 … 5,332 … 20.4%
2010-11 … 25,947 … 6,593 … 25.4%
2011-12 … 26,373 … 7,087 … 26.9%
Higher education proposals
President Barack Obama and Republican challenger Mitt Romney differ on several higher education issues. Here is a look at a couple of them:
Ending bank-based lending in the federal student loan market was a centerpiece of Obama’s higher education policy during his first term. The government used to paid subsidies to private lenders. By ending that, Obama said the government shifted more than $60 billion in savings back to students. Some of the money was used to increase the maximum Pell Grant award.
Romney has called for an end to this system and vowed to restore bank-based lending. His campaign has said restoring private-sector competition would help “significantly in bringing the cost of tuition back down.”
What does this mean for student borrowers? Little, because students never had the option to choose which loan program they used. Colleges make that decision.
About 13 percent of all college students attend a for-profit college. Some have called for more oversight of these schools, pointing to data from the U.S. Department of Education that shows 47 percent of student loan defaulters attended for-profit colleges.
Under Obama the Education Department adopted a “gainful employment rule” that strives to make sure programs receiving federal student aid prepare people for the workforce. The department also added rules to address misrepresentation in college recruiting.
Romney has praised for-profit colleges and Republicans have called for a repeal of the gainful employment rule. Romney’s education platform calls for “new models” in higher education and pledged to “welcome private-sector participation instead of pushing it away.”
While higher education hasn’t played a major role in the 2012 presidential election, whoever wins the race will shape financial-aid policies that will affect millions of students and families.
That’s especially true with the Pell Grant, an estimated $34.5 billion aid program that helps low- and moderate-income students pay for college.
Spending on the program doubled under President Barack Obama, partly because of increased payouts and other changes made by the president and Congress. The program’s growth was also fueled by rising college enrollments and the recession, which made more students financially eligible. Obama has called for future increases in the maximum award, which is currently $5,550.
During the debates, Republican challenger Mitt Romney promised to “keep our Pell Grant program growing” and has also pledged not to cut “funding” and “grants” for college students. His comments surprised some observers, because in his position paper on education Romney said he would “refocus Pell Grants dollars on the students who need them most,” which was taken to mean fewer students would receive the aid.
What’s missing, however, is how either man would pay for Pell, which faces a multibillion dollar shortfall in 2014.
“Two candidates are making outrageous promises without anything to back them up,” said Jason Delisle, who directs the federal education budget project at the New America Foundation, a nonprofit, nonpartisan public policy institute.
“Everyone says ‘Trust me, I’ll find a way to pay for this,’” said Delisle, a former senior analyst on the Republican staff of the U.S. Senate Budget Committee. “They’ll have to cut something, but no one will say what.”
Congress established Pell Grants in 1972 to provide direct aid to needy students. The money doesn’t have to be repaid and the amount students receive is tied to income levels, not the cost of the college they attend.
During Obama’s term the number of Pell recipients increased from about 5.3 million during the 2007-08 academic year to 9.4 million last year.
Some students say they wouldn’t be in college without it. Brandon Hopkins, 27, decided to attend Georgia Gwinnett College after realizing Pell would cover all his costs without him needing any loans. About half of all Pell recipients are older than 24.
Kailyn Davillier is paying for college on her own and depends on Pell as well as scholarships, loans and a work-study job at the University of New Orleans. Davillier, a graduate of Wheeler High in Marietta, came to Georgia after Hurricane Katrina but wanted to return to New Orleans for college.
“Pell is the foundation of my financial aid,” she said. “Without it, I’d have to take a semester off so I could work a second job to raise money to come back to school.”
Georgia State University Associate Provost Tim Renick said he is a strong supporter of the program because it keeps students in school. More than half of Georgia State’s undergraduates get the grant, placing the school among the top 25 in the nation with the highest percentage of recipients.
As a result, Georgia State felt the impact when Obama and Congress changed the program to keep it afloat.
Students used to be able to receive two Pell awards in one year to help pay for summer classes, but that option was no longer available this past summer. That contributed to a drop in summer enrollment at 33 of the 35 colleges in the University System of Georgia. Georgia State’s summer enrollment dropped 8 percent, and while 4,555 Pell Grant students attended the year before, only 1,648 were there this year.
“What worries me are the short-term fixes,” Renick said. “What would be helpful would be to have stability. It’s hard to have proper advisement, planning and programs when there are significant changes every six months.”
Between March 2009 and July 2012, the funding, eligibility requirements or payment options for Pell and other student grants and loans changed at least half a dozen times.
While Obama has called for the maximum award to be increased, he hasn’t specified where the money would come from. Money for other Pell increases partly came from the savings produced when Obama ended bank-based lending in the federal student-loan market. The government used to pay subsidies to private lenders.
Romney has released few details of how he would afford the program. A budget plan from his running mate, U.S. Rep. Paul Ryan of Wisconsin, would change who is eligible and cancel the next five years of inflation increases to the maximum award.
Megan McClean, director of policy and federal relations for the nonpartisan National Association of Student Finance Aid Administrators, wasn’t surprised by the lack of specifics. She said she expects there will be larger discussions after the election over who should get the awards and how much they should be.
But Delisle said the Pell plans out there now count on Congress spending more annually.
“The problem is, neither candidate has said what would be cut to pay for this,” he said. “This program is headed for a fiscal cliff and we cannot give candidates a pass on what they would do.”