Obama's Budget May Augment Pell Grants

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The president's budget proposal, made last week, aims to expand the government's role in making college more affordable, including an overhaul of the Federal Pell Grant Program.

Should the proposal pass, the nation's poorest students would be eligible to receive an additional $500 in Pell Grants, increasing the maximum award to $5,350-a number which would be adjusted each year based on inflation.

More than 50,000 UC students-including 7,500 at UC Berkeley-receive Pell Grants, UC officials said.

The university will receive $10 million in Pell Grant funding from the budget proposal and the recently passed stimulus bill combined, said UC spokesperson Chris Harrington.

"We believe that this will expand opportunity for students," Harrington said. "We are pleased with that commitment to higher education and making college affordable for all students."

Next year, Pell Grant recipients are guaranteed to also receive $119 more as a result of the stimulus bill.

Under the budget proposal, the grants will become part of an entitlement program similar to Social Security or Medicare-with the government covering the cost of grants even if universities overspend their grant accounts.

The proposal would also tie the grants to inflation for the first time.

"Students will know from year to year that whatever happens to the economy, they will get enough money to cover the difference," said Nancy Coolidge, systemwide coordinator of student financial support.

Freshman Adam Becker said the $2,500 he receives in Pell Grants each semester comprises the bulk of his financial aid. If the budget proposal passes, he could receive up to $3,119 next year.

"Right now, the grant has really saved my life," he said. "But all the other aid I receive is for much smaller amounts, so it would be really helpful to get more from the Pell Grant."

The proposal seeks to make the federal government the direct lender for all loans, ending subsidies to private lenders such as banks.

According to Coolidge, this would not affect students, but it could be difficult for schools that primarily work with private lenders to switch over to the new system.

"It's a big difference for schools that are set up to do things a certain way, and it will be an expensive change," Coolidge said.

UCLA, UC San Diego and UC San Francisco are the only schools in the UC system that currently work with private lenders.

Coolidge said while universities are generally pleased with the proposal, she expects there to be some dissent.

"There are some people that think that the government using their own cash to fund social programs is an increase in this kind of socialistic policy-making," Coolidge said. "I would imagine that it could be quite controversial."

The proposal is certainly a step in the right direction, Coolidge said, but the federal government could do more to level the playing field when it comes to higher education.

She noted that the minimum income to be eligible for Pell Grants is relatively low at $22,050, disadvantaging students living in higher-cost areas like California.

"If we had one political agenda to push, UC would want to see regional sensitivity analysis recognizing that people in higher-cost areas need more," Coolidge said. "In some areas, less than $30,000 a year could buy you a decent lifestyle, but in California, you would be practically homeless."


Contact Anna Widdowson at [email protected]

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