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Editorial: Pell Grant cuts problematic

BY DI EDITORIAL BOARD | APRIL 16, 2014 5:00 AM

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GOP scion Paul Ryan paid a visit to Iowa over the weekend to preach party unity, just a day after the House passed his most recent budget with the support of all but 10 of his fellow Republicans.

The Ryan budget, passed last week in the House, but without any real prospect of becoming law, would cut the federal Pell Grant program — a need-based financial-aid program that provides grants that don’t have to be paid back — by $125 billion over 10 years. 

While we understand that the cuts proposed in Ryan’s plan will not be realized — the budget will never see the light of day in the Senate — they reflect the misplaced priorities of Rep. Ryan, R-Wis., the self-styled very-serious policy wonk of the Republican party, and his many acolytes. Under his direction, the party has rallied behind regressive spending cuts that would harm the nation’s low- and middle-income students, 24.8 million of whom received Pell Grants during the 2012-13 school year.

Ryan’s plan would effectively cut federal grant aid for higher education by freezing the cash-value of Pell Grants at their current level for the next 10 years. The real value of Pell Grants has fallen in recent decades as tuition costs have risen — in 1972, the maximum-value grant covered 72 percent of average tuition costs, but today the maximum grant of $5,730 covers only about a third of those average costs. A decade long freeze would allow the value of these grants to be eroded by inflation and rising college costs, further diminishing the program’s ability to provide tuition support for low-income students.

According to a report from the Center on Budget and Policy Priorities, the real value of these grants would fall by 24 percent by 2024 under this plan, and some formerly eligible middle-income students would lose their grants entirely.

Much of Ryan’s reasoning for these cuts is built on the dubious idea that federal grant money is actually causing tuition costs to rise.

“I think we have to look at the fact that we are feeding tuition inflation,” Ryan told The Daily Iowan. “There’s a lot of good work that has been done, Richard Vedder’s studies, lot of these studies are showing that the federal government is in many ways feeding high tuition inflation, and we need to go at the root cause of that as well.”

But even a cursory look at the pressures forcing tuition costs upward gives lie to Ryan’s argument. Certainly, these forces are complex, but in Iowa particularly, most of the public-university tuition hikes over the last decade have been enacted in order to replace falling public funding for higher education. Ryan’s plan amounts to an effort to fight a problem born of falling public investment in higher education by further reducing public investment in higher education.

Ryan’s budget proposal demonstrates more than mere disregard for low-income students, however. The budget includes deep cuts to Pell Grants while leaving Social Security untouched and actually increasing defense spending. No reasonable fiscal plan could seek to balance the budget by sacrificing important investment in higher education while propping up the bloated institutions perpetuating U.S. deficit spending.

The plain truth is that Ryan’s budget seeks to appease core Republican constituencies — older Americans and corporate interests, most notably — by focusing his draconian cuts on groups with relatively low political power. The Ryan budget doesn’t represent a bold new vision for American fiscal policy; it’s merely a regressive attempt to balance the budget on the back of low-income students, Medicaid beneficiaries, and food-stamp recipients.


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