NAICU Washington Update

Pell Shortfall Addressed in Draft House Supplemental

June 03, 2010

After weeks of political infighting over what domestic funding should be included in the war supplemental, House Appropriations Committee Chairman David Obey (D-Wis.) has proposed an emergency spending package that includes $5.7 billion to cover the funding shortfall in the Pell Grant program. The machinations aren't over yet, though -- a committee mark-up scheduled for May 27 had to be postponed because of continuing controversy over domestic spending.  In addition to war and disaster funding, Obey has made Pell funding a top priority, along with $23 billion to save K-12 teacher jobs.

The health care and student aid reconciliation bill provided $36 billion over the next ten years for increases in the Pell Grant program.  Still, the program needs additional current funding to cover the rapid and unexpected growth in recipients.

When there is a downturn in the economy, more students qualify for need-base student financial aid, and more students return to postsecondary education to improve their skills for jobs in the future. The shortfall funding makes up the difference between the number of recipients estimated, and the actual number of students who receive grants. Under normal economic conditions, the Department of Education sees a 3 percent year-to-year increase in applications for Pell Grants; over the last two years they have seen a 20 percent increase.

This additional $5.7 billion proposed by Obey should keep Pell Grant whole for the upcoming fiscal year. If funding is not provided now, it will be taken out of the next education appropriations bill for FY 2011, forcing cuts either to the Pell Grant maximum, or to other education and health programs.

NAICU and the Student Aid Alliance have been working hard to get the Pell Grant shortfall paid for in the supplemental appropriations bill for two main reasons - to ensure the program is adequately funded, and to ensure there is funding available in the FY 2011 appropriations bill for the other student aid programs.  (See SAA appropriations request and letter to the House.)  Please let your representative and senators know that you support this provision of the supplemental bill.

Keeping the Pell shortfall funding in the bill will not be easy.  Before the Senate passed its version of the war and disaster funding bill on May 27, HELP Committee Chairman Tom Harkin (D-Iowa) lobbied the leadership to include both Pell Grant shortfall and education jobs funding in the Senate version of the bill.  However, he had to abandon his attempts, when budget hawks from both parties voiced concerned about the increased level of federal spending.

Once the House votes on the bill later in June, Congress will then have to negotiate a final bill that meets war, disaster and educational needs, along with the concern about rising deficit spending.

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