Pell grant increases would be linked to cost of living

By Jake Stillwell
Communications Director, United states Student Student Association

The Pell was once the cornerstone of federal financial aid, covering a large chunk of the cost of college for low-income students. Today, the purchasing power of the grant has diminished significantly. It covers well below half of the cost of college and was greatly underfunded during the past eight years.

The USSA has always prioritized investment in the Pell grant as major budget and appropriations priority, fighting each year to have Congress appropriate more funding for the program. This year, we’re making some real progress.

After taking office last winter, President Obama quickly expressed his support for reforming the financial aid system to increase investment in low-income aid programs like Pell. In September, the U.S. House of Representatives answered the call by passing the historic Student Aid and Fiscal Responsibility Act (HR 3221).
This bill eliminates government subsidies to private banks that issue federal student loans, saving the government $87 billion for direct lending financial aid programs. $40 billion of those savings are re-allocated to the Pell grant, which increases the maximum award amount to $5,550 in 2010 and to $6,900 by 2019.
Additionally, starting in 2011, future increases in the Pell grant will be linked to the rising cost-of-living by indexing it to the Consumer Price Index plus 1 percent. Basically, this means the Pell grant will keep pace with the rising cost of living. The bill is now before the Senate Health, Education, Labor, and Pensions (HELP) committee, of which Senator Al Franken is a member.

The USSA, along with students nationwide, are urging the Senate HELP committee to move swiftly on passing this monumental piece of legislation that helps make education a right for all.