Pell Costs Surging

Compiled By Staff
December 15, 2009

The Pell grant program, which provides higher education grants to low-income students, will cost $18 billion more than the federal government originally anticipated.

The Associated Press [from an article originally located at] reported last week that that the shortfall is about double the typical Pell price tag and the largest in the Pell's 36-year history. Terry Hartle, a lobbyist for the American Council on Education, explained to the AP that the deficit was the result of surging college enrollment and the government's boost of the Pell grant this year, making more people eligible for aid.

Brenda Murtha, financial aid director at Augustana College in South Dakota, confirmed that more students are indeed applying for Pell aid. "There is a 21 percent increase in students who qualify for Pell grants," she said in an interview with Keloland TV. "And when I look at the dollar amount last year versus this year, it's up 42 percent, and that's just one school."

The stimulus legislation increased Pell grants to $5,350 per student, about $600 more than was given before. The increased grant resulted in allowing more middle-income families to be eligible for aid. After the initiative was announced early this year, US News & World Report predicted that the new legislation would make the Pell available to 800,000 more families and would cost an additional $4 billion to $5 billion a year.

Administration officials were quick to note that the shortfall will not affect students and families. But others were unsure how the government would cover the extra costs, particularly because many believe that expanding the Pell program is not likely to be a temporary phenomenon.

Jason Delisle, director of the federal education budget project at the New America Foundation, wrote on the group's blog, Higher Ed Watch, that the Pell budget will require $30 billion a year beginning in 2012.

He noted that the shortfall is therefore not the biggest concern. "It is the $30-plus billion annually for Pell Grants as far as the eye can see," Delisle wrote. "Many people will surely cheer such a large funding commitment to the program, but budget hawks will no doubt bristle at these figures, which to them, show a spending program out of control."

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