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New Spending Bill Tightens Eligibility Rules for Pell Grants

On Saturday, Congress passed a $1 trillion spending bill to fund the government over the next nine months.  The bill makes some significant – and often painful – cuts in the federal budget, including cuts to the Pell grant program, which helps over 9 million needy students access postsecondary education.

Though the legislation maintains the current $5,550 maximum Pell grant award, it tightens eligibility standards that will likely eliminate access to these crucial grants for over 100,000 students nationwide.

The major Pell Grant eligibility changes in the final bill include:

  • Requiring Pell and student loan recipients to have a high school diploma, a GED, or be homeschooled, eliminating “ability to benefit” eligilbity;
  • Reducing the number of years a student can use Pell grants from nine years to six;
  • Reducing the income level under which a student will automatically be eligible to receive the maximum Pell grants from $30,000 to $23,000; and
  • Raising the minimum award for eligibility.

The bill also temporarily eliminates the six-month grace period on loan interest for graduates with subsidized federal student loans.

The trimming of the number of years that students can receive Pell grants would hit African-American and transfer students particularly hard. And the Pell Grant eligibility cuts apply to all students as of July 1, 2012  – even those students who already enrolled.

While the original bill put forward by House Republicans made even deeper cuts, this compromise version will still have a life-altering impact on students who rely on Pell, and on our economy as a whole: an educated workforce is essential to economic growth. We’re set to be 3 million college degrees short by 2018, and now more than ever, young adults need affordable, quality education. These cuts go in exactly the wrong direction.

Young people understand how important a college education is to their future.  In a recent survey conducted by Young Invincibles, Demos and TICAS, nearly 8 out of 10 young adults said that attaining a college degree is more important than a generation ago. On top of that, the survey revealed a general agreement that college is becoming increasingly out of financial reach: 75% of young adults believed that college had become harder to afford in the last five years.  Unsurprisingly, young adults oppose cuts to student aid – an opposition that holds true across party lines.  While the spending bill certainly could have been worse, the cuts to Pell grants and student aid are clearly a big step backward.

Maximum Pell grant as a percentage of tuition, 
fees, room and board, public 4-year institutions, 1980-81 to 2010-11