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Budget compromise would preserve maximum Pell grant, NIH funding

Maximum Pell Preserved
December 16, 2011

WASHINGTON -- Although final details were still elusive late Thursday, members of Congress appear to have reached a compromise on a federal budget for 2012 that would preserve the maximum Pell Grant while changing the program’s eligibility criteria. The spending plan would also slightly increase funding for the National Institutes of Health and end the grace period for interest on subsidized student loans.

Republicans and Democrats agreed on much of the budget early in the week, but conflicts over policy riders and extending a payroll tax cut has postponed passage so far. Late Thursday, Congressional budget negotiators were reported to have reached an agreement, with little time to spare: if Congress could not compromise, the government would have shut down at midnight Saturday.

The bill, HR 3671, draws from ideas put forward in Republican and Democratic spending plans earlier this year: it would preserve the maximum Pell Grant at $5,550, but change the program’s eligibility criteria, making at least 100,000 of its 9 million recipients ineligible. The grants could be used for a total of 12 semesters, not 18, as in the past -- a change that would affect an estimated 62,000 beneficiaries and take effect July 1, 2012. Semesters in which students are enrolled only part-time will count only partially toward the 12-semester limit; a student enrolled half-time, for example, would be considered to have used the grant for half a semester. (Note: This paragraph has been corrected from an earlier version.)

The maximum amount families could earn and automatically contribute nothing toward an undergraduate education would decrease from $30,000 to $23,000. Students without a high school diploma or the equivalent would also be barred from receiving the grants, so students could no longer qualify by taking the controversial "ability to benefit" tests.

Preserving the maximum Pell Grant has become the top higher education priority for the Obama administration as concern about the deficit has increased. The eligibility changes hew closely to suggestions that higher education advocates made in April, after House Republicans proposed slashing the Pell budget and reducing the maximum grant by as much as $2,000.

The Institute for College Access and Success criticized the cuts, saying they would disproportionately affect black students and transfer students. Students at community colleges who need remedial coursework to be prepared to begin class would also be affected by the 12-semester limit, the group said in a statement.

Still, the budget would forgo some eligibility changes from a previous House Republican bill that was criticized by many higher education groups, including a change to the income protection allowance that the American Council on Education estimated would exclude as many as 400,000 recipients.

The changes in the current budget would save approximately $11 billion over 10 years, according to a Congressional Budget Office estimate. To help pay for the grants, the “grace period” on subsidized undergraduate direct loans -- when the government pays the interest for six months after a student graduates or leaves college -- would be eliminated for loans made between July 1, 2012, and July 1, 2014.

The bill would maintain funding for research: the National Institutes of Health would see a slight increase of $299 million, or 1 percent, to $30.7 billion. (A spending bill passed in November increased funding for the National Science Foundation by $173 million, or 2.5 percent.) The Department of Energy’s Office of Science would also see a 1 percent increase, to $4.9 billion.

Other Education Department programs would undergo a 0.189 percent across-the-board cut, which would apply to all programs except for Pell Grants. Federal work study and the Supplemental Educational Opportunity Grant would both undergo the cut, but otherwise were funded at 2011 levels. Even with the cut, the TRIO program for college readiness would get a funding increase, from $827 million to $840 million.

The Strengthening Institutions program for minority-serving colleges would be cut slightly, from $84 million to $81 million, largely due to the slight funding cut. And while details on State Department programs for international study were not available late Thursday, funding for the programs for international education and foreign language in the Education Department would also undergo a slight cut -- from $76 million to $74 million.

A vote on the measure is expected as early as today. 

 

 

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