In response to a request from the ranking member of the House Education Committee John Kline (R-MN), the Congressional Budget Office (CBO) issued revised estimates yesterday on the cost of increasing and indexing the Pell Grant as proposed in the Student Aid and Fiscal Responsibility Act (H.R. 3221). The revised estimate adds an additional $11.4 billion over ten years to the original projections.
The increase is based on new data released by the Department of Education that shows rising numbers of students participating in the Pell Grant program. The CBO also believes that the Consumer Price Index (CPI) -- the index that will determine future mandatory increases in the Pell Grant -- will be slightly higher than expected.
This is the second revised estimate CBO has released that adds fuel to the cost savings debate. In July, CBO Director Douglas Elmendorf issued a revised estimate in a letter to Senator Judd Gregg (R-NH) on the savings that would come from eliminating the Federal Family Education Loan Program (FFELP). After accounting for the costs of risks such as future defaults, that revised estimate placed the savings from eliminating FFELP at $33 billion less than CBO’s original estimate.
Opponents to H.R. 3221 denounced the legislation as another example of an "out-of-control" spending program.
"Describing this legislation as fiscally responsible has always been a dubious claim," Kline said in a statement released yesterday. "CBO is confirming what commonsense has told us all along -- a massive expansion of the federal government will be costly to taxpayers in the long run."
In his letter to Kline, Elmendorf reminded lawmakers that the revised estimates will not be used for Congressional scorekeeping purposes because the Congressional budget resolution is enforced using estimates consistent with the baseline that underlies the resolution. In short, CBO’s original July 24 estimate is the official estimate that is being used to mandate increases in the Pell Grant and other higher education and K12 programs.
"No one is fooled by their tired tricks," said Rachel Racusen, a spokeswoman for the chairman of the House education committee in The Chronicle of Higher Education. "The truth is, this cherry-picked analysis has absolutely no impact on this historic bill."
Other Media Coverage
Latest Cost Analyses Fuel Fight Over Student-Loan Bill The Chronicle of Higher Education
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