eSchool News | Pell grants page 1

Obama: Ryan’s economic plan costly to education

President Barack Obama is highlighting various sections of Republican vice presidential candidate Paul Ryan’s sweeping budget proposals as he tries to paint the GOP ticket as too extreme for the nation. Next up in his analysis: education.

On Aug. 21, Obama plans to tell voters in sharply contested Ohio that Ryan’s budget proposal would cut $115 billion from the federal Education Department, remove 2 million children from Head Start programs, and cost 1 million college students their Pell Grants over the next decade. The line of criticism will be coupled with television ads.

Obama’s latest line of criticism was described by Democratic officials involved in the plan. The officials spoke on the condition of anonymity because they were not authorized to discuss the strategy before the president began executing it, which he planned to do at Capital University in Columbus and continue later in the day during a stop at a community college in Reno, Nev.…Read More

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Debt-ceiling bill forces cuts to education spending

budget_cuts — A $900 billion increase in the national debt ceiling would be matched by cuts to agency budgets over the next 10 years, including cuts to education funding.

After weeks of political posturing, the agreement reached by lawmakers to raise the nation’s debt ceiling contains some good news for low-income college students—and bad news for other education stakeholders.

With just hours left before the national debt bumps against its cap, emergency bipartisan legislation to allow the government to borrow more money faces one final test in the Senate. Expected passage there sends the bill to President Barack Obama, averting a potentially disastrous, first-ever government default and making a down payment toward taming budget deficits.

The legislation, which easily passed the House on Aug. 1, is virtually assured to clear the Senate shortly after noon Aug. 2 by a bipartisan tally. The White House promises Obama will sign the measure into law.…Read More

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Unease grows about future of financing for Pell grants

With the lame-duck Congress winding down and a $5.7 billion gap in financing looming for next year’s Pell grants–and a further $8 billion gap for the following year–there is growing uncertainty about the future of the grants, the nation’s most significant financial-aid program for college students, reports the New York Times. After months of wrangling, Congress grappled Friday with stopgap financing to keep the government in business after the budget expires this weekend. But the temporary measures, probably extending to mid-February, will most likely continue the current budget without providing extra Pell money. Earlier this year, Congress passed legislation that provided an extra $36 billion over 10 years to the Pell grant program and increased the maximum grant to $5,550, up from $4,050 five years ago. But with a new Congress arriving in January and determined to cut spending, it is unclear whether that expansion is sustainable. If Congress does not cover the gap in financing, millions of students could see their Pell grants reduced by more than 15 percent, with the maximum grant shrinking by about $845.

Financial aid officers are starting to worry about a program that is supposed to provide more than $30 billion next year to college students.

“Our students count on that money, and we don’t have the resources to try to make that up,” said Alice Murphey, director of financial-aid management at the City University of New York. “There’s always been a lot of support in Washington for Pell, and enough people on our side. This is the first time it’s ever looked like there wouldn’t eventually be a solution.”…Read More

Lawmakers trade broadband grants, school reforms for education jobs

The measure must still pass the Senate, where Republicans have threatened a filibuster. — The measure still must pass in the Senate, where Republicans have threatened a filibuster.

School districts would get $10 billion in additional funding to help them avoid laying off teachers, and college students would get $5 billion more in Pell Grant money to account for a shortfall in that program, under a supplementary spending bill passed by the U.S. House of Representatives July 1. But the additional funding would come at a price for other programs, including $600 million in cuts to broadband stimulus funding and $800 million in cuts to school-reform initiatives.

The changes are part of an $80 billion war spending bill needed to pay for President Obama’s decision to send 30,000 additional U.S. troops to Afghanistan. As of press time, the bill was awaiting action in the Senate.

The president has promised to veto the bill over its proposed cuts to his school-reform initiatives, including $100 million in charter school funding, $200 million in Teacher Incentive Fund money, and $500 million from the Education Department’s showcase “Race to the Top” (RTTT) program.…Read More

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Student aid, linked to health care, gets a trim

An increase in Pell Grants was cut back in the revised student aid reform legislation.

Congressional Democrats on March 18 trimmed their original student loan plans, reduced spending for community colleges, and eliminated early childhood money from a broad rewrite of a college aid bill piggybacked on to fast-track health care legislation.

The student loan measure would be the biggest change in college assistance programs since Congress created them in the 1960s, ending a private-lender program by having the government originate all loans to needy students.

But facing savings smaller than anticipated from the switch and a shortfall in Pell Grant money for low-income students, Democrats are proposing no increases in Pell Grants over the next two years and a modest increase over the five years that follow.…Read More

Groups make renewed push for student loan reform

Some Senate Democrats haven't committed support for SAFRA.

Higher education and K-12 activist groups have stepped up their support in recent days for President Obama’s student lending reform legislation, which has stalled in the U.S. Senate while high-ranking Democrats consider passing the reform package with a simple majority vote.

Days after one of Obama’s signature proposals was said to be in trouble on Capitol Hill, reform advocates were energized March 12 by news that Democrats could pass the Student Aid and Fiscal Responsibility Act (SAFRA) alongside health care legislation through a process known as reconciliation, which doesn’t require 60 votes to avoid a filibuster in the Senate.

The student lending overhaul—pushed in recent weeks by Education Secretary Arne Duncan—would allow the federal government to lend money directly to students, instead of having students go through commercial lenders. Duncan said SAFRA would save taxpayers $87 billion over 10 years by doing away with subsidies to private lending companies, who then tack on interest to student loan payments.…Read More

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