House Passes FY2012 Budget Resolution That Slashes 2012-13 Pell Grants

The U.S. House of Representatives voted 235 to 193 on Friday to approve a Republican fiscal year (FY) 2012 budget resolution that would roll back the 2012-13 maximum Pell Grant to FY2008 levels.

The budget resolution would reduce the maximum Pell Grant award to pre-stimulus (also known as the American Recovery and Reinvestment Act) levels.  While the resolution lacks details, this could mean returning Pell to FY2008 levels. The Congressional Budget Office (CBO) estimates that this would result in a maximum Pell Grant of $3,040 for the 2012-13 academic year -- down from the current $5,550 maximum award. Additionally, the Republican budget resolution calls for the repealing and defunding of the Healthcare and Education Reconciliation Act (HCERA), which includes mandatory funding for the Pell Grant program. This could further lower the maximum grant by $690. Additional options outlined for review by the resolution include: 

 

  • changes to limit the lifetime limits of the Pell Grant program
  • rescinding recent expansions to the Need Analysis formula
  • eliminating administrative cost allowances to schools
  • repealing the expansion of income-based repayment provisions in the Student Aid and Fiscal Responsibility Act (SAFRA), and 
  • eliminating interest subsidies on all Stafford Loans.

 

The budget resolution is a relatively symbolic measure because it is a nonbinding resolution that sets broad spending levels that appropriations' committees use to set specific spending levels for federal programs. In addition, it is unlikely that the Democratic-controlled Senate will approve the measure.

Despite the symbolic nature of the resolution, NASFAA joined the higher education community to advocate against the measure.

"We urge you to vote against this resolution because it would threaten the nation's ability to compete in the future economy by impeding, or denying altogether, the aspirations of low-income students to higher education," wrote Justin Draeger in a letter sent to representatives before the vote.

House Democrats offered a substitute FY2012 budget resolution that was defeated by the House. The Democrats’ substitute proposed using mandatory spending to maintain the maximum Pell Grant at $5,550 and to pay for this by reducing spending on other programs. The substitute resolution also established a deficit neutral reserve fund for college affordability' to allow the House Budget Committee Chairman to revise the allocations, aggregates, and other appropriate levels in the resolution for legislation that makes college more affordable, including efforts to maintain the maximum Pell grant award, as long as it does not increase the deficit.