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Obama’s budget proposal would cut Pell Grant funding

BY RYAN COLE | FEBRUARY 15, 2011 7:20 AM

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The number of students receiving Pell Grants and the amount they receive could decrease in the next fiscal year as a result of President Obama’s new education-budget proposal.

Federal Pell Grants provided more than $15 million in financial aid to nearly 4,300 University of Iowa students this year.

U.S. Secretary of Education Arne Duncan delivered the fiscal 2012 education budget Monday in a press conference call. Among other programs, the plan would cut $20 billion in Pell Grant funding for the coming year and $100 billion over a decade.

“We must cut where we can to invest where we must,” Duncan said.

UI officials said the proposed changes would have a significant effect on the university’s low-income students.

“Anytime that we see a reduction in Pell Grant funding … that affects our neediest students,” said Beth Oakes, a senior associate director of Student Financial Aid.

The grants, assisting more than 9 million students nationwide each year, are awarded on a rolling scale, with students facing greater needs receiving more money.

Amounts are determined by “financial need, costs to attend school, status as a full-time or part-time student, and plans to attend school for a full academic year or less,” according to the U.S. Department of Education website.

The 13.6 percent of UI students aided by the grants would still receive up to $5,550 annually with the plan. Derek Willard, special assistant to the UI president for government relations, said the cuts would likely result in fewer students qualifying for the full amount.

Willard said decreasing funds could result in restructured academic plans, including part-time attendance or delayed college entrance for some.

Obama’s budget proposal would save an additional $2 billion by reducing loan subsidies for graduate students and through consolidation of programs. Monday’s address also discussed completion-based funding for college students.

“Rather than giving people money up front, [the government] would give it for successful outcomes,” said Carmel Martin, U.S. Department of Education assistant secretary for planning, evaluation, and policy.

Martin, who fielded questions during the call, said government officials would like to make higher education an incentive for low-income students, and officials are looking for areas to implement the policy.

Though many education areas face budget reductions, the proposal would increase spending in the department overall by $2 billion, creating a $48.8 billion budget. The 4.3 percent increase from last year would allocate additional funds to education programs such as Race to the Top, Investing in Innovation, and the Early Learning Challenge Fund.

Obama’s proposal could face several changes as it goes to Congress. The new federal fiscal year begins Oct. 1, but discussion and implementation of legislation could occur beyond that date.


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