Congress Reaches FY 2012 Budget Deal to Maintain Max. Pell, with Likely Caveats

Lawmakers in the House and Senate reportedly reached a deal yesterday on nine appropriations bills to fund government programs through the rest of fiscal year (FY) 2012.  The final FY 2012 budget bill is expected to be released sometime today and will set 2012-13 award year spending levels for the federal student aid programs. While the official language has not been released, there is indication that the bill will maintain the $5,550 maximum Pell Grant for the 2012-13 award year by cutting spending on other student aid programs and reducing the number of Pell eligible students.

Negotiators have been working on an agreement for the Labor, Health, Human Services and Education (Labor-H) appropriations subcommittee bill for several months. The final bill will likely mark a compromise between the draft House and Senate bills, which both maintained the $5,550 Pell Grant for award year 2012-13, but varied greatly in the way they plug the current $1.3 billion shortfall the Pell Grant program faces. The Senate bill called for the eliminating the interest subsidy on undergraduate subsidized Stafford loans during the six-month grace period and would redirect those savings into the Pell program. The House bill proposed a series of eligibility changes, including:

  • A reduction in lifetime Pell eligibility from nine years to six years;
  • The elimination of the Ability to Benefit option to establish general eligibility for Title IV funds;
  • And a reduction in income threshold to qualify for an automatic zero EFC.  

Legislative language is expected to be released today and Congress is expected to pass the entire FY 2012 budget later this week. Federal programs are currently being funded by stop-gap spending measure that is scheduled to expire on Friday. NASFAA will conduct a detailed analysis of the bill as soon as the legislative language becomes available.