Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: February 16, 2007             No. 4

Increase in Pell Grants, but There is a Catch 

President Bush’s proposed 2008 budget would increase the maximum Pell Grants over the next five years. Bush’s proposal would raise the Pell Grant award by nearly 14%, $550, to a maximum of $4,600—the largest increase for low-income students in decades. In addition, the maximum award for academically talented low-income students in the Academic Competitiveness Grant Program would increase by 50% in 2008 to $1,125 for freshmen, and $1,950 for sophomores. Taken in its totality, the maximum award would cover all tuition and fees and up to $4,000 in living expenses for community college students. 

While this is the first major increase in decades, before in the education community gets excited, there is the other side of the increase. The President is proposing to pay for this by cutting lender subsidies and eliminating the Supplemental Educational Opportunity Grant program (SEOG). This program augments Pell Grants for low-income students. The increase comes at a cost to low-income students and to lenders in the federal government’s guaranteed-loan program. To accomplish this proposal and achieve additional savings, the President’s Budget also proposes to eliminate other higher education programs. Yet colleges under this proposal will still be required to return the federal share of money they use to make new Perkins Loans. His Budget also includes $25 million for a study of a database that would track the educational progress of students. The U.S. Department of Education under Secretary Spellings is supporting Bush’s proposal to eliminated some of these higher education programs, indicating that some of these programs, like that of SEOG, is awarded, “under an outdated statutory formula and not optimally allocated based on a student’s financial need.” 

For additional information on the Pell Grant, please contact Anne McKinney, Director of Federal Relations for the California Community Colleges System Office at (916) 445-7280.

 —Jamillah Moore, Ed.D.