The essence of what separates a Pell Grant from other forms of federal student aid is in its name. Since it’s a grant, not a loan, you don’t need to repay it. Proposed Congressional cuts in the program could seriously affect the educational plans of many college students.
Pell Grant Basics
Administered by the U.S. Department of Education, the Federal Pell Grant Program awards need-based aid to undergraduates and some students enrolled in post-bachelor’s programs. The maximum available you can receive for the award period July 1, 2016 through June 30, 2017 is $5,815.
The actual amount awarded depends on your:
- Financial need
- Cost to attend school
- Full-time or part-time status
- Plans to matriculate for an entire academic year or a shorter period
The maximum number of times you can receive the award is 12 semesters. You can only receive an award from one institution at a time.
Officials determine your need after you complete a Free Application for Federal Student Aid (FAFSA). Schools either credit the award to your account, directly issue you a payment, or utilize a combination of these procedures.
Student Debt Management
The Federal Pell Grant Program is crucial in stemming the growing burden of college student loan debt, which now totals $1.3 trillion. Within the last year alone, the average dollar amount of debt has ballooned 6 percent per student.
As many as one of every six student borrowers defaults on their loans. As a borrower, you might become so mired in the impossibility of student loan debt that you consider bankruptcy. If you assume that filing bankruptcy will eliminate your liability, you might be surprised to learn that special provisions apply regarding dischargeability of student loans.
Pell Measures Congress is Considering
Congress determines the funds appropriated to run the Federal Pell Grant Program. Among the $5 trillion non-Defense reductions proposed by the House Budget Committee plan are deep cuts in Pell grants. These proposed cuts would make it even harder for you to afford a college education as educational costs continue to rise.
Planned changes including freezing the maximum award amount for a decade despite continually rising costs. Both mandatory and discretionary funding go towards this program. One proposed change is eliminating mandatory funding. This would probably result in additional reductions in benefits and eligibility and make getting a student loan costlier.
Proposed reductions also fail to realize how dramatically Pell Grant purchasing power has dropped over the years. The current maximum award represents only around 30 percent of the average tab for your education at a four-year public institution—less than half its 1980 purchasing power.
The subcommittee’s proposed budget recommends cutting $1.31 billion from the Pell Grant program. The House Budget Committee has pushed for freezing the Pell Grant at its current maximum grant for ten years.
What We Can Do Together
Stopping Congress from making Pell Grant cuts and freezing the maximum amount requires quick action. As a part of our Fight Student Debt campaign, we have started a petition urging Ohio lawmakers not to divert Federal Pell Grant Program funding when finalizing the upcoming budget. Make your voice heard by signing the petition below and sharing it with others.