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Proposed Pell Grant Cuts Threaten Students’ Education

Members of Student Senate have posted this sign in the window of their office.

Sara Wielenberg | Staff Writer | 11-4-2011

Five hundred and fifty thousand students face elimination from Pell Grant eligibility next year with the proposal of the FY12 Labor-HHS bill, and by 2017 that number will extend to over a million.

If Congress provides funding that is insufficient to fund the maximum Pell Grant, this bill indicates that the Education Secretary is to cut all Pell awards for the school year of 2012-2013. The Fiscal Year 2012 Labor, Health and Human Services, and Education, and Related Agencies Appropriations Bill (FY12 Labor-HHS) will cause drastic changes to Pell Grant criteria, and more specifically to prospective or current students’ educational opportunities.

Income protection allowances (IPAs) are the amount of income a student or family is expected to keep to pay the cost of living before helping to pay for college. Half of the cuts proposed to the Pell Grant program come from retracting the increases in IPAs from 2007. IPAs right now are close to the poverty line and fall below the limits of other programs. Decreasing this further would mean students who must work in order to support themselves and their families would find themselves without Pell Grants or with decreased Pell Grants. Working more to make up for that lost money would only result in them losing further grants the next year.

The bill also calls for a broader definition of the word “income.” It would include things like refundable tax credits, means-tested benefits, and untaxed Social Security benefits. Poorer families would find themselves with diminished grants because of these necessary benefits.

Jonathan Bohn, the director of government relations for the Minnesota State University Student Association (MSUSA), put it this way: “So if you need government help to feed your children or to keep a shirt on your back that could diminish your Pell Grant.” Picking up that gap on their own would be challenging.

A third effect of the bill is that no family income exceeding $15,000 would give the student an automatic-zero estimated family contribution. The automatic-zero qualifies full-time students for the maximum Pell Grant if they meet some other requirements. The End-of-Year Pell Report indicates that this change in the threshold would impact nearly two million students who receive Pell Grants.

Previously, Pell Grants were available for nine years. When that limit went into effect in 2008, it only affected students who received a grant for the first time on or after the 1st of July that year. The proposed changes would lower that limit to six years and would apply the new limit to all students, no matter how close to graduation. A student preparing for their final semester could suddenly find him or herself without the Pell Grant. Scraping up that money on one’s own could prove nearly impossible that late in the game.

According to Bohn, the bill alters other items as well in the eligibility for Pell Grants: “[The bill] eliminates eligibility for ability-to-benefit students.”

ATB students are students who lack a high school diploma or GED. Another change is the elimination of less than half-time students.  Finally, Bohn mentions that the bill “raises the minimum eligibility level from 5% to 10% of the maximum award. What this means is that the maximum award is set at $5,550 and the minimum award is set at 5% ($277.50) of the maximum.”

The change, then, would raise the minimum award to 10% of the maximum, or $555. Students who usually receive less than $555 from the Pell Grant will then receive nothing.

These proposed changes are all part of a plan to decrease federal government spending. They add up to approximately $40 billion of the $44 billion cuts in the Pell Grant over ten years, and they affect the more vulnerable students. Sarah Denne, a BSU junior, is one student whose Pell Grant is threatened. The Pell Grant is vital in order for her to attend BSU, and she is not alone. “My Pell Grant is $2,775 per semester,” says Denne. “My Pell Grant pays for 63% of my education each semester.”

According to a press release from the U.S. Senate Committee on Appropriations, the Pell Grant program assists about 9.4 million low-income to middle-income students. Grants are a major part of what allows students in those situations to go to school.

The need for a degree in today’s economy is on the rise and with these cuts to the Pell program, fewer potential students will find that degree attainable. Almost nine out of ten Pell Grant recipients who graduate have student loans. Their debt is thousands to tens of thousands of dollars higher than fellow students with higher incomes. Cuts to the Pell Grant will lay a financial burden on those who already have lower incomes and higher debt. Some may choose not to go on to college and this will affect the economy later on.

Because the Pell Grant is a federal program, these cuts are a nation-wide issue. Pell Grants are essential for almost 140,000 students in Minnesota. The cuts would result in a loss of the Pell Grant for 9,500 of those students and a loss of $70 million in grants. MSUSA is circulating petitions at the seven state colleges as well as at the technical and community colleges of Minnesota.

At Bemidji State there was tabling, door-knocking, and class-presentations to get signatures for that petition. Sarah Shepherd, Office Manager for the Bemidji State University Student Association (BSUSA), says that she and Joe Moubry, University Liason for BSUSA, spent four hours knocking on doors and tabling in Walnut Hall last weekend.

As of November 1st, 533 Bemidji State students signed the Pell Grant petition. Those signatures, combined with the signatures from other Minnesota schools amount to approximately 2,500 signatures. The number of signatures is a point of pride for Shepherd. “Out of seven state colleges, we have the highest percentage of our student body that signed. That’s a big deal in our small school.”

Many are hoping that it will be a big deal when it comes to voting on the bill as well. The petition can still be signed online at http://msusa.org/index.asp?Type=B_BASIC&SEC.