As part of his federal budget proposal for 2010, President Barack Obama included a plan to expand and reform the Pell Grant program by enacting common-sense student loan reform.The Pell Grant is the largest federal grant program for students who demonstrate financial need, and more than 5.1 million students benefited from the program during the 2006-07 school year.
But the program must currently rely on the annual budgeting and appropriations process for funding, which means that award levels often fail to keep pace with inflation or college costs.
In 1976 the maximum Pell Grant covered 72 percent of the average cost of attendance for a public four year college, but this figure fell to 33 percent by 2006, according to campusprogress.org.
Obama’s plan would make the Pell Grant a mandatory program, meaning that it will be removed from annual exposure to unpredictable political whim. The president’s plan would also raise the maximum Pell Grant award level by $200 for the 2010-11 school year, and tie the maximum grant level to one percent above inflation, so that the grant’s purchasing power will be better protected from rising college costs and inflation.
Campusprogress.org says that, under the president’s plan, Pell Grants for students in Louisiana would increase to $3,663 in 2010-2011, $132 more than 2009-2010 levels. The group also estimates that 4,108 more students in the state would receive Pell Grants.
The Institute for America’s Future and the U.S. Public Interest Research Group estimate that 260,000 more students could receive the Pell Grant if these reforms are enacted.
The proposal can be paid for in part by student loan reforms, which will save taxpayers an estimated $94 billion over 10 years, while making the student loan system more reliable for students.
A tentative agreement was reached by lawmakers in the House and Senate on the budget Monday, which would allow for budget reconciliation for student aid. The agreement must now be approved by the conference committee and both chambers of Congress.