The Bush administration next week will propose the largest Pell Grant increase in 30 years, U.S. Education Secretary Margaret Spellings said Thursday.

Top grants for the neediest students would increase by $550, to $4,600, for fall 2008, the secretary said in a speech at North Carolina State University. The president’s budget blueprint then envisions small annual increases thereafter until the maximum grant reaches $5,400 in five years.

“Higher education costs have made it more difficult for low and middle-income families to afford college,” she said. “This is real money that will help more low-income students achieve the dream of a college education.”

Bush is due to present his 2008 federal budget covering all agencies, including education, on Feb. 5 in Washington, D.C.

“Over the last 25 years, college tuition increases have outpaced inflation, family income, even health care,” Spellings said. “Young people are starting out in life saddled with debt — making it difficult to start a family, buy a home, plan for the future or even continue their education.”

The secretary did not say how the administration would pay for the increase, but the budget blueprint is likely to provide these details.

In 2005, President Bush recommended a $500 increase in the maximum Pell Grant over a five-year period, though the president and Congress never agreed on how to implement the plan that year.

Yesterday’s announcement comes just days after the Democrat-controlled House of Representatives proposed a $260 increase in the top grant for 2007. Democrats had hailed that move as the first significant step toward raising the maximum grant, which has remained at $4,050 for nearly five years.