The debt-ceiling deal signed by President Obama last week will cut over $900 billion in federal funding over the next 10 years. Yet even in an extremely budget-conscious atmosphere, members of Congress singled out the Pell Grant program for an increase in funding to guarantee college access for low-income students. Under the terms of the new law, the Pell program would receive $10 billion in FY 2012 and $7 billion in FY 2013, for a total of $17 billion. While this funding still leaves a $1.3 billion projected shortfall if the maximum grant level is to be preserved at its current level of $5,550, the funding in the debt-ceiling law will go a long way toward ensuring college access for the 9.4 million students across the country who depend on Pell Grants for college education. Ending in-school subsidies for interest on graduate student loans will save $18.1 billion and ending financial incentives for on-time student loan payments will save $3.6 billion. The $21.6 billion total over 10 years will pay for the Pell Grant funding and reduce the deficit by the remaining $4.6 billion.
Many in the higher education community, and the broader business community, have urged Congress not to sacrifice programs that contribute to our economic well-being in the name of fiscal responsibility. An educated workforce is fundamental to our national economic competitiveness, and New England’s institutions of higher education play a critical role in developing a highly skilled and innovative workforce. Higher education is also an economic driver in its own right, providing jobs and generating over $100 billion in New England alone. Maintaining robust funding for Pell Grants ensures that colleges don’t have to decide between turning away students and cutting jobs.
While Pell Grants and other education programs may face more stringent cuts as the deficit-reduction committee works its way toward an additional $1.2 trillion in funding reduction, there is hope that this initial $17 billion for Pell Grants signals a continuing commitment to preserving college opportunities and supporting the nation’s institutions of higher education.
As a member of New England Council, we publish the DC Shuttle each week featuring higher ed news from Washington. Because Congress recessed following the debt-ceiling vote last week, the Council will not publish its Weekly Washington Report Higher Education Update this week. But because the debt-ceiling deal made special provisions for the Pell Grant program, the Council put together this update for our Aug. 8 DC Shuttle.
Founded in 1925, the New England Council is a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the New England region. The Council's mission is to identify and support federal public policies and articulate the voice of its membership regionally and nationally on important issues facing New England. For more information, please visit www.newenglandcouncil.com.