Pell Grant program faces $18 billion shortfall

The unexpected rising enrollment of college students, a federal official said, has created an $18 billion shortfall in the Pell Grant program, the largest in its 36-year history.

Speaking to the Associated Press on condition of anonymity the administration official said the program will cost $18 billion more than Congress and the White House had anticipated over the next three years.

"The administration is working with Congress to fill the gap, and we are committed to making sure the U.S. has an educated work force able to fill the jobs of the 21st century," said the official.

The gap will not affect students and parents but brings challenges to the federal government, which now must seek ways to allocate the funds.

The Pell Grant program, a federal college aid initiative for families that typically earn less than $40,000 a year, usually has shortfalls and surpluses. Anyone who is eligible gets the grant, however the federal government can never really anticipate how many students will apply.

Terry Hartle is a lobbyist for the American Council on Education, a leading higher education group in Washington, according to AP.

He told AP the bleak job market is driving more people back to school.

"College enrollment goes up when the economy goes down; it's been that way ever since the Great Depression," said Hartle.

As part of President Barack Obama's economic stimulus law, lawmakers approved a 13 percent increase in the maximum grant that boosted the amount of Pell Grants this year. The move changed the programs eligibility formula and allowed for more low-income families to receive college aid.

The Pell Grant grew by about $600 to $5,350 making the maximum grant rise on average by less than 6 percent a year.

Hartle says the measure was a huge increase and part of the looming shortfall.

However others feel the Obama administration's higher education policy has opened doors for thousands of students and their families who would not otherwise afford the rising cost of college tuition.

Chairman of the House Education and Labor Committee, Rep. George Miller, D-Calif., said lawmakers plan to work together in order to ensure funds are allocated for the program.

"In this difficult economy, it is good news that more people are going back to school to get the skills they need for in-demand jobs," he said. "We want to make sure we are doing everything we can to help them in this effort."

Critics maintain a speedy comprehensive progressive jobs program that puts people back to work must be the country's most important domestic priority. Rapidly enacted economic recovery initiatives, many say, must be one of Obama's top priorities in order that post-college students and every household is guaranteed job opportunities with livable wages, worker protections and good benefits.

Last week Education Secretary Arne Duncan and White House Budget Director Peter Orszag met with other committee members to address the budget gap.

Meanwhile Hartle feels confident that the shortfall will not affect students or their families saying the good news is they will get every dime they have been promised. However the challenge, he said, given the federal budget deficit, will be for the government, which will be stuck trying to fill the additional $18 billion gap.

Last year the Pell Grant faced a smaller shortfall of about $6 billion.

 

 

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