In a January 14 speech at the Florida Community College at Jacksonville, President Bush announced that his FY 2006 budget will ask Congress to increase the maximum Pell Grant award to $4,150 this year and $4,550 over five years--a commitment of $15 billion in all over ten years--in order to help more low-income students pay for higher education.
With the federal government facing record deficits due to tax cuts and security spending, the President indicated he would pay for his proposal not with new funding, but through spending less in other areas. A White House fact sheet on the President's speech said that "by using taxpayer money wisely, the Presidents new reforms will create savings over 10 years to provide $4.3 billion to eliminate the current Pell Grant shortfall; $15.0 billion to increase the Pell Grant maximum award by $100 a year for the next five years (from FY06 through FY10), which will increase the maximum award for low-income students to $4,550; and make permanent the expanded loan forgiveness for math, science, and special education teachers passed last year."
"We've got a unique way of saving money, and that saved money from the administration of the student loan program will be plowed into the Pell Grant program," Bush said. "There's a $4.3-billion shortfall in the Pell Grant program. We intend to use the savings from changing how student loans are granted and administered to closing that deficit."
While he provided no further details about the plan, the President did say that he intends to ask Congress to reform the student loan program to make it more "effective and efficient." The fact sheet stated, "the current federal student aid system does not serve American students well, and is not the best way to use taxpayer money." The White House also may have foreshadowed a position on loan consolidation when it noted in the fact sheet that "a disproportionate amount of benefits are provided to borrowers out of school rather than those currently attending school."
The President's new budget will apparently retain several pre-existing higher education proposals, such as year-round Pell Grants for low-income students, $125 million for Community College Access Grants, $250 million to continue the Community-Based Job Training Grants, and $100 million in grants to Pell-eligible, low-income students who study math or science.
Bush also resurrected his plan to reward high school students who take rigorous course loads by giving them an additional $1,000 in Pell Grants.
This merit-based Pell Grant would reward first- and second-year Pell Grant-eligible students who have completed a rigorous State Scholars program of study in high school an additional $1,000. It was first announced in the Presidents FY 2005 budget, but legislators did not provide the $33 million requested by President Bush.
"We want to raise the standards and provide incentives for people to aim high in life," the President told the Florida group.
Rep. George Miller (D-Calif.), the senior Democrat on the House Education and the Workforce Committee, issued this response to the Presidents proposals:
"President Bush and the Republican Congress have lost so much credibility on education issues that I am not alone in feeling very cautious about this new promise for increasing Pell grants by $500. My first instinct is to say 'show me the money,' because this Administration has a track record of broken promises on education funding.
"Even President Bush knows that a $500 boost over five years is not enough--he himself promised, in 2000, that he would raise Pell by more than twice that amount. But $500, if it is real, would be a start in the right direction."
Miller went on the express his "hope that President Bush is serious about dealing with the shortfall in the Pell program. The fact is that so often the Administration proposes to increasing spending in one account by reducing spending for critical education services in another account. If the President's plan would rob Peter to pay Pell, it would be unacceptable."
"I welcome the President's new proposal, but urge America's families with kids applying to college to 'not count their chickens before they hatch,'" Sen. Edward M. Kennedy (D-Mass.), told the L.A. Times. Kennedy also said that Bush had promised to raise the Pell Grant maximum to $5,100 during his 2000 campaign.
The newspaper also reported that White House Deputy Press Secretary Trent Duffy told reporters that the cuts Bush intended to pursue would impact only "the administrative side," adding that "student loans are completely protected."
By Elizabeth B. Guerard
NASFAA Assistant Director for Communications
Posted January 18, 2005 on www.NASFAA.org, the Web Site of the
National Association of Student Financial Aid Administrators (NASFAA).
Copyright 2005. Redistribution to non-NASFAA institutions is prohibited
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