|College education just got more expensive.|
|Subject||Pell Grant funding formula being revised to save government expenses.|
|Topic||Government and the Economy; Market Failure, Regulation and Public Choice|
Pell Grant, college, financial aid.
Beginning with the 2005-06 academic year, the government seeks to save approximately $300 million by giving out smaller Pell Grants to recipients, and to eliminate funding for some prospective student financial aid recipients.
Pell Grants provide funding for the poorest students and despite the cutbacks, total spending could still surpass $12 billion. The government is arguing that the maximum Pell Grant, set at $4,050, is insufficient for access to college, and that cutting spending now will help provide more funds to needy students in the future. The spokesman for the House Committee on Education and the Workforce argued, “…there are consequences for wrongly adding hundreds of millions of dollars to the current budget shortfall.”
Analysts anticipate that while half of the approximately 5.3 million Pell Grant recipients will not be affected, many will see their benefits drop significantly, and approximately 89,000 students will be denied funding under the new aid calculation. As a result, these students will rely further on student loans for financing their college educations.
Opponents of the cuts argue that in tough economic times, students need more, not less, financial assistance, and denying aid to students will have significant negative consequences not only for those students, but also for society as a whole.
Greg Winter. “Students to Bear More of the Cost of College.” The New York Times. 23 December 2004. http://www.nytimes.com
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