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Budgets

Obama's Proposed Budget Cuts Pell Grants, Funding for Undergraduate Students

Strategic Insights

— 2 min read

President Barack Obama's proposed FY 2012 budget aims to increase funding for college Pell Grants to $36.1 billion for about 9.6 million students, but with a provision that limits students to receiving more than one Pell award per year. This change, combined with the elimination of in-school interest subsidies for graduate and professional students, could result in individual students receiving less money. Secretary of Education Arne Duncan emphasized the need for the cuts, citing a $20 billion shortfall for Pell Grants and a historic increase in demand for financial aid.

Key Takeaways:

  • The proposed budget would increase Pell Grant funding to $36.1 billion, but with a provision limiting students to receiving more than one Pell award per year.
  • The Pell Grant Protection Act would eliminate in-school interest subsidies on loans for graduate and professional students, affecting about 11 to 12 percent of GW undergraduates.
  • The country has seen a historic increase in demand for financial aid, leading Secretary of Education Arne Duncan to call for more efficient use of funds.
  • The Pell Grant program was originally estimated to cost a couple hundred million dollars each year, but the number of students receiving two grants per year made it financially unsustainable, according to Duncan.
  • About 11 to 12 percent of GW undergraduates receive Pell awards, with over 1,390 students receiving grants this year.
  • The House of Representatives has also proposed reducing federal aid expenditures, which GW is reviewing and expects to change multiple times in the coming weeks and months.
  • The proposed budget also includes expanding the Federal Perkins Loan Program to provide $8.5 billion in new loan volume each year, estimated to reach about three million students, and $175 million in competitive grants to boost college completion.

Statistics:

  • The proposed Pell Grant funding of $36.1 billion would benefit about 9.6 million students during the 2012-2013 award year.
  • More than 1,390 students received Pell Grants at GW this year.
  • About 11 to 12 percent of GW undergraduates receive Pell awards as part of their financial aid packages.
  • The country has seen a historic increase in demand for financial aid, with the government facing a $20 billion shortfall for Pell Grants.
  • The proposed expansion of the Federal Perkins Loan Program would provide $8.5 billion in new loan volume each year, expected to reach about three million students.

Sources:

  • The Hatchet, "Budget proposal could limit GW students' access to financial aid," February 17, 2011.

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