President Obama presented a 2012 budget on Monday that has limited increases for education but a commitment to protect the current $5,550 maximum Pell Grant, which is the subject of potential cuts on Capitol Hill.
The Obama plan would not increase the maximum Pell Grant but would provide $41 billion to shore up the program’s shaky finances due to heavy use during this recession. This figure is $18 billion above federal Pell spending as recently as fiscal year 2010, according to U.S. Education Department data.
To continue the $5,550 maximum grant, the administration is proposing a series of cuts. In higher education, the leading cost savers would end in-school interest subsidies for graduate students and eliminate the year-round Pell Grant, a new program through which students can get more than one grant per year if they choose accelerated year-long studies.
“We are cutting where we can to invest where we must,” Education Secretary Arne Duncan said in presenting the plan. “These are challenging times, but we can’t delay investments that will secure our future. We must educate our way to a better economy by investing responsibly, advancing reform and demanding results.”
The budget plan comes amid heavy pressure from the new Congress for drastic spending cuts across government. Late last week, House Republicans unveiled a plan that would cut $100 billion in domestic programs, including a projected 15 percent cut in Pell funding. Education groups said that plan, if enacted, would chop the maximum grant by $845, to $4,705.
As a result, most higher education analysts were supportive of the president’s plan. “Students recognize the political realities requiring cuts to the Pell Grant in order to save it from deeper reductions,” said Lindsay McCluskey, president of the United States Student Association.
However, it is “regrettable” that the administration must propose offsetting cuts to protect Pell, said Justin Draeger, president of the National Association of Student Financial Aid Administrators.
