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Here’s How a Proposed Spending Bill Could Affect Your Financial Aid Award
Sometimes, keeping up with all of the complex decisions being made in this country feels like an insurmountable task.
And it might be — I mean, no matter your political leanings, the sheer volume of issues up for debate means that staying up to date will leave you dizzy, at best.
The truth is, there’s a lot on the line for people from all walks of life as we navigate a confusing landscape of upheaval and realignment. The decisions being made affect all of us in one way or another.
We have to pay attention sometimes — and this is one of those times.
So let’s talk about a federal spending bill that was up for consideration last week, because it has the potential to affect you or someone close to you (like your teenager who’s gearing up for college).
Wait, What Exactly Are We Talking About?
The fiscal year 2018 House Labor, Health and Human Services, and Education Appropriations bill was approved by the House Appropriations Committee with a vote of 31-21 on Thursday.
It still needs to pass through the House and the Senate before heading to President Donald Trump’s desk for his signature, but the subcommittee approval is the first step in the process of instating the new budget.
And the Pell Grant Program? Well, that affects how much federal financial aid low-income college students are given each year.
A Pell Grant is a need-based subsidy provided by the federal government that helps low-income students pay for college. A Pell Grant is awarded based on a number of factors, including income and whether the student is enrolled full time or part time, and is the foundation on which the rest of the student’s financial aid is structured.
What Does This Spending Bill Propose?
The bill will cut about $2.4 billion from the Education Department’s budget, and will rescind another $3.3 billion out of the Pell surplus. (Here’s a brief overview of the Pell surplus, along with a bit of its history.)
The bill will also freeze the maximum Pell Grant award at $5,920 per year, meaning that over the next several years, the money awarded will have less purchasing power behind it as inflation and the cost of college continue to rise.
“The current maximum Pell Grant covers the lowest share of college costs in over 40 years,” according to Jessica Thompson, policy and research director for the Institute for College Access & Success.
Freezing it at this amount is a move that Thompson calls an “assault on equitable access to higher education,” as students will have to start borrowing more than their higher-income peers in order to achieve the same level of education.
This will only serve to perpetuate the vicious cycle that many low-income families are trapped in — a sickening merry-go-round of too-little aid, too many loans, too-high interest rates, and, in many cases, the need to drop out of college indefinitely (thus leading to lower-paying jobs and, subsequently, a cross-generational lack of access to higher education.)
Trump must sign the bill by Oct.1, which is the start of the 2018 fiscal year. That’s when we’ll find out what the future of the Pell Grant Program will be — and what that means for students who depend on that financial aid.
Grace Schweizer is a junior writer at The Penny Hoarder.
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