Hurricane relief could stunt boost in Pell Grant funding for students

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Possible increases to the maximum federal Pell Grant award will likely be small in the aftermath of hurricanes Katrina and Rita, which will cost the government billions in repair and reconstruction costs, according to university and CSU financial aid officials.

Deliberations in the U.S. Senate and House of Representatives on elements of the Higher Education Act show that the maximum appropriated increase for Pell Grants will likely not be more than $50. The U.S. Senate on Oct. 27 voted down an amendment to legislation that could have potentially raised the maximum federal Pell Grant to $4,250 from its current $4,050 level.

Diane Ryan, director of Financial Aid and Scholarships at CSUN, said the rejection of the $50 increase on Oct. 27 is a loss for students.

“We were looking forward to being able to offer some additional grant money,” she said.

The recent hurricane victims and what they are going through financially makes the rejection understandable because of the fiscal restraints the government is operating under, Ryan said.

“Hurricane Katrina cost money we weren’t expecting to have to spend,” she said, adding that there were factors other than the hurricanes the Senate takes into consideration.

Dorena Knepper, director of governmental affairs at CSUN, shared a similar sentiment.

“The odds of funding a lower maximum are greater now than they were a month ago, before the devastating impacts of the two recent hurricanes on the federal treasury,” she said.

The Higher Education Act, the federal law that governs student financial aid for the nation’s universities and colleges, is still up for reauthorization this fall. The act needs to be reauthorized every six years, and was set to expire in 2004 before a series of extensions passed by lawmakers extended the act as some of its more complex components were debated, according to Knepper.

In funding Pell Grants, lawmakers perform two separate functions: authorizing maximum amounts and actually appropriating how much of that maximum amount the government can afford to spend.

The current maximum authorized Pell Grant amount is $5,800, but in reality the maximum grant awarded was $4,050. The Senate and House of Representatives are both working on financial aid legislation, and a conference committee will combine the two to create one final piece of legislation.

The House’s bill, as it is now, would raise the maximum authorized Pell Grant amount to $6,000, and the Senate’s bill would make that amount $5,100 for 2006-07, with increases later on.

George Conant from the CSU’s federal relations office, however, said the actual Pell Grant amount funded by appropriators will likely not be anywhere near the $6,000 or $5,100 figures.

“The amount of money the government has to spend does not increase,” said Lili Vidal, associate director for Financial Aid and Scholarships at CSUN. “Congress says they want to increase the budget every year, but when it comes down to it, they don’t have the money (for the increase).”

According to news reports, Sen. Edward M. Kennedy, D-Mass, proposed the rejected amendment to the Senate appropriations bill, which would have increased the maximum Pell Grant to $4,250 by 2006. Senators voted down the increase on Oct. 25 because Kennedy failed to suggest cuts to additional programs to compensate for the costs of increasing the Pell Grant.

The U.S. House of Representatives produced education bill that will nominally raise the maximum authorized Pell Grant amount to $4,100, as compared with the Senate’s $4,050. The two will next try to combine their bills into a single piece of federal legislation.

Some university officials said the severe fiscal impacts of hurricanes Katrina and Rita also had a negative impact on the Pell Grant not being increased significantly this time around.

“Almost everything is on the table with Congress trying to fund (relief for) hurricanes Katrina and Rita,” Vidal said.

Knepper said that because of the financial effects of the hurricanes, Congress extended the Higher Education Act to allow more time to address the various issues and impact of the disasters.

Jennifer Kuhn, principal analyst for the Legislative Analyst’s Office, said she does not think increasing the maximum Pell Grant from $4,050 to $4,100 – the House appropriations bill – would have much of an effect on student access. A $50 increase represents only a 1.2 percent increase, not enough to keep pace with inflation, she said, which typically runs 3 to 4 percent a year.

“The real value of the grant is actually going down, even though the dollar amount is increasing slightly,” Kuhn said.

Kuhn said most students are facing increases in other college costs, such as housing, books and tuition, that exceed that 1.2 percent the Pell Grant could increase, which means “the $4,100 isn’t going to stretch as far as the $4,050 did in previous years,” she said.

“The Senate is more generous, seeking to increase the maximum amount to $5,100 for 2006-07 and increasing it $300 a year over the following five years,” Knepper said.

According to the U.S. Department of Education, the appropriated maximum award is often used as an estimate of the program’s support for needy students.

Knepper said that in February 2005, with respect to the Pell Grants, the Bush administration recommended in a submitted budget to Congress that the maximum amount for Pell Grants be increased by $100 each year over the next 5 years until it reaches $4,550.

The appropriation process takes precedence over the authorized maximum Pell Grant award for each year and the appropriated maximum award is set.

“Appropriation is never up to the level that is processed,” Ryan said. “Pell Grant deliberation is an ongoing process and it has never been fully funded.”

Valencia Bankston can be reached at city@sundial.csun.edu.