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More Peril for Pell

April 6, 2011

WASHINGTON -- As the battle over the 2011 federal budget continued Tuesday on Capitol Hill, with a possible government shutdown looming, Rep. Paul Ryan (R-Wis.) launched what is sure to be the next spending fight: a proposed federal budget for 2012 that would cut entitlement spending and slash spending on grants to low-income students, research, and job-training programs.

The proposal calls for reducing Pell Grants to “pre-stimulus” levels, consolidating job-training programs into “career scholarships” and pruning spending on applied research and development while maintaining funds for basic research. It deals more in words than numbers, laying out general principles of the budget while avoiding specific financial details for most smaller discretionary programs.

“There’s a lot that we can’t know about it and don’t know about it,” said Becky Timmons, assistant vice president for government relations at the American Council on Education. “It’s obviously pretty drastic, and the impact on Pell is dire.”

The proposal, which would cut an estimated $5.8 trillion in federal spending in the next 10 years, comes on the heels of a spending resolution for the current fiscal year that would slash the maximum allowable Pell Grant by $845 and cut money for scientific research and minority-serving institutions to generate overall savings of more than $100 billion. That resolution is at the center of the current budget standoff which, if not resolved by Friday, when a temporary budget measure expires, could lead to a shutdown of the federal government.

Both proposals contrast starkly with President Obama’s proposed 2012 budget, which would keep the maximum Pell Grant at $5,550. And both mark a change in status for Pell Grants, which historically have enjoyed bipartisan support and flown mostly under the radar in Congressional fights. Before the recent past, it was rare for the program to be mentioned by name in a sweeping proposal like Ryan's, which deals in broad budget categories and leaves entire agencies -- as well as frequent targets of Republican spending cuts, such as the National Endowments for the Humanities and the Arts -- unmentioned. But as the program has grown, with both student need and costs climbing, it has become more expensive and, most agree, unsustainable in its current state -- "endangering the viability of the program for the truly needy," the proposal argues.

The Ryan proposal also draws on a long-debated contention against federal spending on student aid: that increases in Pell Grants drive increases in tuition. The proposal cites a 2005 University of Oregon study that found a "nearly one to one" correlation between Pell Grant increases and corresponding hikes in tuition costs at private colleges and universities and out-of-state tuition at public institutions.

“I think reasonable people of all political persuasions would want to put Pell on a more sustainable footing,” said Timmons, who asserted that the link between Pell Grants and tuition costs is a "false premise" undercut by two federal studies. “The one thing I don’t read into Congressman Ryan’s proposal is the fact that bipartisanship in regard to the Pell program is lost. That’s always been one of the hallmarks of the Pell program, that it enjoys wide bipartisan support.”

Dianne Boardley Suber, president of Saint Augustine's College, said a cut in the maximum Pell Grant to pre-2008 levels would have a devastating impact on the students at her historically black institution in North Carolina. About 78 percent of students at Saint Augustine's receive Pell Grants, and many of them already work long hours to supplement their financial aid money. "If they are going to get $800 less, many are going to have to stop out," she said.

Both Pell Grants and job-training programs would come in for more scrutiny under the proposal, which calls for tracking recipients’ employment outcomes as well as whether they receive welfare or food stamps. Few details were provided on what steps Congress would take to streamline the job training programs, which the plan said were riddled with duplications and inefficiencies.

“I think in general, we don’t shy away from accountability and that’s one area we’re looking to improve,” said Jim Hermes, director of government relations at the American Association of Community Colleges. “It’s hard to tell exactly what they’re recommending here.”

The fate of federal money for scientific research -- which would be a big winner in President Obama’s 2012 budget -- is unclear under the Republican proposal, which offers support for spending for “energy security and basic research and development” while proposing cuts to commercial research and areas of duplication.

In an open letter to President Obama and Congressional leaders last Thursday, the presidents of the Association of American Universities and the Association of Public and Land-grant Universities joined business leaders to call for a bipartisan plan that would cut entitlement spending while continuing to invest in research and infrastructure.

Whether or not such a compromise is on the horizon, with Democrats in control of the White House and Senate, the House Republican blueprint has little chance of becoming law. Still, the deep cuts proposed in H.R. 1 and now in the 2012 proposal have some leaders concerned about what might be in store when more details emerge -- and it appears that Pell Grants will be at the center of the fight.

“There would be would be no argument from the higher-education community that the deficit needs controlling,” Timmons said. “There isn’t even much of an argument that the Pell Grant program needs to be put on some kind of viable financial footing, and that will involve some changes to the program.”

But, she said, any changes should be driven by policy considerations rather than solely financial or ideological reasoning. “Changes ought to come from a policy-driven standpoint,” she said. “Starting from the other direction will leave an awful lot of students with no ticket for admission.”

 

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