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House Panel Approves Pell Grant Increase
Source: Associated Press/AP Online via Yellowbrix
July 22, 2009
WASHINGTON – President Barack Obama’s plan to boost Pell Grants for low-income college students cleared the House education committee Tuesday, the first step down a long and potentially rocky path through Congress.
The bill would link Pell Grants to inflation for the first time since the program’s creation in 1972, raising the maximum grant from $5,500 to $6,900 over the next decade.
House Democrats would pay for the increase by ending federal subsidies for private loans, an idea resisted by lenders who fear the loss of tens of billions of dollars and their supporters on Capitol Hill. The subsidies would be replaced by a massive expansion in direct loans from the government.
“We can either keep sending these subsidies to banks and a broken system, or we can start sending them directly to students,” said California Rep. George Miller, chairman of the House Education and Labor Comittee.
Last year, lenders made $56 billion in loans to more than 6 million students. By contrast, the government made $14 billion in direct loans to 1.5 million students.
The panel approved the measure on a mostly party-line 30-17 vote. Two Republicans, Reps. Thomas Petri of Wisconsin and Todd Russell Platts of Pennsylvania, joined Democrats in support of the bill.
Other Republicans criticized the bill as yet another expansion of the federal goverment.
The bill puts the government in near-total control of student lending, said Minnesota Rep. John Kline, senior Republican on the committee.
“We’ve already seen the federal government step in and take control of banks, insurance companies and even iconic American auto companies,” Kline said.
As consumers, college students likely wouldn’t notice any difference in their loans. Broadly speaking, the bill doesn’t do much to make loans cheaper or help pay them off.
It does keep interest rates for some federal loans – those based on need – from jumping from 3.4 percent currently to 6.8 percent as scheduled in 2012. Interest rates for most other loans would remain at 6.8 percent.
It also would expand one of the government’s smaller loan programs, college-administered Perkins loans, by offering it on more campuses.
Obama didn’t get his way on one thing: The president wanted to take Pell Grants out of lawmakers’ hands entirely, making the program a costly mandatory entitlement like Social Security and Medicare.
The biggest providers of student loans are: Reston, Va.-based Sallie Mae; Citigroup Inc.’s Stamford, Conn.-based Student Loan Corp. and Lincoln, Neb.-based Nelnet Inc.
BonnieW22
2 months ago
Parish my email is only1momivator@yahoo.com if you would like me to share more to help your family. I charge by the hour and many have found the services worthy
BonnieW22
2 months ago
The frustrating thing is that while the pell grant is being increased to help those undergrad, it would be nice to have more grants, scholarships and opportunities for those who wish to continue their education on the graduate level without having to take out loan after loan after loan. Being a single mother of two and all of us pursuing our education, one must first walk in the mocassinsbefore making the judgment..... Thanks
ParishaS
2 months ago
This sounds very good because my mother is single and our household is not enought to support my college funds. And I do not want a lot of loans and I'm the first to go to college so this would really put a relief on my mother and make me happy too.
MeganO119
3 months ago
That is really great for those who qualify. Apparently, I have an EFC of over $5000 for a family of two. My husband and I only made about $26,000 last year. That's nearly 1/5 of our total annual income BEFORE TAXES. How does the government think I should pay for food, rent, and other daily expenses while I go to school?
KatherineA480
3 months ago
I agree, the age to file as an independent should be lowered. It seems like there is plenty of money to go around for pay raises for lobbied congress members and corporate higher-ups of failing companies that have been bailed out by the government. For once, I would like to be taken care and I think the youth of our nation needs to reject any other type of treatment.
breepatient
3 months ago
I like the ideal that the pell grant is going to be increased, but I do wonder where the money is going to come from seeing that our economy seems to be underfoot right now. Although, this seems to be a good thing, I can only guess how students are going to feel about the increase in interest rates toward loans.
KelleyM39
3 months ago
the thing is yes we are going to get a raise in our pell grant but they plan on raising interest rates to cover it, cant get something from the government, for nothing.
JashG3
3 months ago
WOW people here comes the change! Get few more $$ to pay for a piece of paper after investing 4 years and than spending the next several years looking for a decent paying job. America is so great. The schools get richer and the graduates have to suck up and be thankful for every morsel they can get from the government or others. What a great bunch of future leaders our country is producing! AND where is all that extra money going to come from????
KimberlyM1351
3 months ago
Also, in addition to what gilbertgrape528 stated, you have until May 1 to have the FAFSA forms filled out. I found this out June 1, but was able to work it out with them because it was not that far past the deadline. Anyone enrolled in school should always call or email your Financial Advisor as that is what they are there for, to help us students.
gilbertgrape528
3 months ago
Karen 41, you HAVE to fill out a FAFSA form online, and do this as close to January 1 as you can. You should complete your tax return first, if at all possible, otherwise you wil have to backtrack later and go through a verfication process. After that process is complete, you will get a SAR report...this tells you if you are eligible for a Pell grant. If you are, you will need to talk to the college financial aid office about how much the grant would be for...this is usually handled directly by the university you are attending. It is probably too late to file a FAFSA form for the Fall semester, but give your college/university financial aid office a call....most are very helpful and will let you know of other options you migth have since you missed the FAFSA filing deadlne. Good Luck!
karen41
3 months ago
How dose one apply for pell grants?
Twan09
3 months ago
i need help try to find some grants
ShannonD653
3 months ago
Thank you Hilary H for the tip on grants for attending. Is this one of those they don't tell you about, you have to ask? I am attending online college due to husband and sister being sick, so that I can care for them and my children and it is costing big!! 1600.00 per class and a 990.00 tech. fee, whatever the heck that is? But I am getting my degree in 2013! I am a 37 year old mother with no job. I have been applying for scholarships left and right to no avail. I did get a pell grant but it will be gone before I see it. I applaud the raise in grants!! Ifsomeone needs help the government should help, This is AMERICA by the way!! We help everyone else before we help us!!
mattlaw
3 months ago
HilaryH163-there is an obvious reason why the government sends the funds directly to the college of your choice-- it is obviously so the funds are used EXCLUSIVELY for schooling. While you seem to be a very honest person, the government cannot assume that. If your college is taking funds out for administrative fees, then I would consider finding another school. Most, if not all schools charge an admission fee (my son's college charged a $200 fee). but if they are socking you for other fees, you may want to consider a faith-based school. Also, some colleges will give grants to you for attending their school-- check it out. My son got a $5000+ grant for attending his college of choice.
bren2dan2
3 months ago
I feel its great idea! More help is what we all need a little of, its hard to ask for it.