Students receiving federal Pell Grants will be eligible to increase their awards by $50 next year, capping the grant at $4,050.

The allocation is a compromise between a Senate bill that would have raised the maximum award by $100 and a Bush administration proposal to leave the maximum at 2002 levels for the next two years.

The federal government currently gives all students who qualify for the need-based Pell Grants up to $4,000 per year. The program is projected to be about $2 billion in debt because more students qualified for the grant than expected this year.

Congress approved $576 million to help pay off the shortfall this year. A point of contention has been whether it is better to reduce the shortfall now or increase the maximum award to meet students’ needs.

“It’s like a cycle (every four to five years),” said GW’s Director of Financial Services Dan Small, referring to the shortfall for the Pell Grant, which is the federal government’s main source of aid to low-income students. “(Executive branch budget planners) are not projecting high enough.”

Small said students receiving Pell Grants and other federal aid do not feel negative effects of budget changes “that much, if at all” because the University attempts to compensate. He said GW can “absorb” students’ needs with University funds, but there will be problems if current trends continue for too long.

About 25 percent of undergraduates in the country receive Pell Grant aid. Approximately 900 GW students have received Pell Grants for the past two years, and 550-600 more students received some sort of need-based aid this September than September 2001.

Although he signed the latest budget, President George W. Bush threatened to veto a bill that increased the maximum award to $4,050. The president’s 2004 proposal would technically increase Pell Grant funding; however, the extra money would be used only to reduce the shortfall and not to increase the maximum award.

Small said although the country is going through a tough economic time, it is not necessarily the best time to try to eliminate the deficit in the Pell Grant budget.

He said the maximum grant should ideally be $6,000-$7,000 so it can fulfill its purpose of helping needy students.

“What’s another year of shortfall because we’re in this tough time?” he said.

Bills currently being debated in the Senate would increase the maximum Pell Grant to up to $11,600 by the year 2010, while House bills would cap the award at $5,800.

The University announced plans to allocate more than $110 million in funding to financial aid next year at its Board of Trustees meeting in late February.

“We have to be more aggressive with scholarship aid, even though that’s very painful for us,” University President Stephen Joel Trachtenberg said.

The 2003 federal budget also includes funding increases for Supplemental Educational Opportunity Grants, which are sometimes paired with the Pell Grant, and for other programs benefiting low-income students.

Some programs, such as the College Work-Study program, which did not receive a spending increase, will see drops in funding from the previous year as a result of an across-the-board cut enacted to prevent a presidential veto.