Pell Grant Awards Face Cuts Following Funding Shortfall

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About 9 million students nationwide and 70,000 students within the UC system could face cuts to their federal Pell Grant awards as the program faces a $5.7 billion funding shortfall.

The program - which aids almost 40 percent of UC students systemwide- is confronted with this funding gap due to an increase in award requests that lawmakers failed to anticipate.

Although the program is designed according to the federal entitlement model - a system through which all funds requested are paid out, such as Medicare - the fund operates on a fixed budget, according to Debbie Cochrane, program director for the Institute for College Access and Success. This has become an issue because lawmakers underestimated the number of students who would ask for money, leaving the program with its current funding shortfall.

"The current pot of funds that is allocated for the federal Pell Grants is not big enough to cover the anticipated needs going forward," Cochrane said. "Unless more money is appropriated for the program, the grants will have to be cut."

However, the UC administration is unconcerned about the funding gap, saying that Pell Grant funding shortfalls are actually frequent occurrences that have been resolved in the past.

"We expect Congress to find a way to (fund the program) and are not anticipating any reductions in grants to students," said Nancy Coolidge, UCOP coordinator for government relations.

The Pell Grant program's troubles come just eight months after the federal government expanded the program by passing the Student Aid and Fiscal Responsibility Act, which increased the maximum grant award to $5,550 for the 2010-11 academic year.

But the increase in award levels exacerbated the shortfall because in addition to the increase in students applying for assistance, the awards they applied for were greater under the new legislation.

The funding gap could result in a maximum award decrease of $845 - a cut of over 15 percent that could leave some scrambling to find money to pay their educational and living costs.

"I wouldn't really be able to afford food and clothing ... and I already owe a lot of people money," said Jessica Martin, a junior transfer student in her first year at UC Berkeley and a Pell Grant recipient. "You shouldn't come out (of college) with a B.A. and $40,000 in debt."

The Pell Grant program comprises a significant portion of UC financial aid awards. Of the almost $810 million given out in aid to students systemwide during the 2008-09 academic year, about $200 million came from the Pell Grant program, according to a March 2010 UC Office of the President report to the UC Board of Regents.

At UC Berkeley alone, 9,076 students received $41.5 million in Pell Grant aid during the 2009-10 academic year, according to campus spokesperson Janet Gilmore.

Congress was set to resolve the funding issue by Thursday, but lawmakers have already taken steps to extend the deadline to allow more debate.

As of press time, the House of Representatives had approved an extension of the deadline to Dec. 18, while the Senate had not yet voted on the issue, according to U.S. Department of Education spokesperson Sara Gast.

If the deadline is extended, current funding levels will be maintained until the new deadline.

"In this tough economy, students need Pell Grants more than ever," said Sen. Dianne Feinstein, D-Calif., in a statement. "Congress is working on a solution which will hopefully provide most students with the maximum award."

Tags: UNIVERSITY OF CALIFORNIA, PELL GRANTS, U.S. HOUSE OF REPRESENTATIVES, U.S. SENATE


Jordan Bach-Lombardo covers higher education. Contact him at [email protected]



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