Pell Grants could face cuts

Pell Grants, one of the most important federal funding programs for higher education, may face a budget shortfall of more than $6 billion next year, the White House announced late last month – making the Department of Education the latest victim of the current economic crisis.

The program, which affects nearly 1,000 students at GW, needs the extra $6 billion to continue running at its current levels, according to Department of Education estimates.

“Indirectly, it may require students to consider more loan options,” said Daniel Small, director of GW’s Office of Student Financial Assistance. “Of course, the Pell Grant is free money. That’s less money that the student has to take out. But we generally know what the Pell Grant will be and we try to fill that gap.”

For the 2006-2007 academic year, 946 GW students received Pell Grants for an award total of almost $2.5 million, according to the Department of Education. Small said the number of students receiving Pell Grants is usually around 1,000 each year. About 60 percent of all GW undergraduate students receive some type of financial aid.

Federal funding – such as Pell Grants and the Federal Work Study program – constitutes only a small portion of the entire financial assistance package. GW undergraduates receive about $10 million in federal funding, but they receive about $180 million from GW resources, including funds from the school endowment or alumni gifts, Small said.

If the Pell Grant program falls short, Small said the University can award students with additional funds from GW resources, which are already the main source of undergraduate financial aid packages.

The size of the Pell Grant is determined by an equation that includes family income and other economic influences that is adjusted every year. By the time GW and other universities begin to calculate each student’s financial aid package, changes in Pell Grants are already factored in, Small said.

“The University knows the sort of funding the program will receive, and we try to adjust policies and procedures in order to award students with the appropriate aid,” Small said.

A worsening economy, combined with social factors like an increase in college applications from nontraditional degree-seeking students, has resulted in this predicted deficit, according to a memo released to Congress by Tom Skelly, the Department of Education budget director.

As of July 31, nearly 800,000 more students applied for federal funding for the 2008-2009 school year than last year – a 10 percent increase and the largest jump in applicants since the inception of the Pell Grant program in 1972.

More than six million undergraduate students will receive Pell Grants ranging from $431 to $4,731 this year, and more than half a million more will be awarded Pell Grants next year, according to the memo.

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