June 5, 2017

Reed, Whitehouse Host Conversation on Future of College Affordability & Importance of Preserving Pell Grants

Senators host discussion with students, financial aid experts, and higher education leaders

WARWICK, RI – In an effort to address the issue of college affordability and make the student financial aid process more efficient for working families, U.S. Senators Jack Reed and Sheldon Whitehouse today hosted a conversation at CCRI’s Knight Campus on the future of federal financial aid.  While a college education has become more important for many jobs, it is increasingly harder for families to afford tuition bills without incurring massive amounts of debt.  Topics at the forum included making college more affordable, the restoration of year-round Pell grant funding, and other issues relating to higher education in President Trump’s proposed budget.

During the discussion, Senators Reed and Whitehouse spoke about the importance of Pell grants, which annually provides need-based federal funding to help qualified students afford the rising costs of college.  Pell Grants help pay for tuition, but unlike student loans, they do not need to be paid back.  Last year, over 7 million students nationwide, including 30,000 Rhode Island students, benefited from over $28 billion in Pell Grants. This school year, Rhode Island students benefited from approximately $107 million in Pell grants, which are named after former U.S. Senator Claiborne Pell (D-RI) to honor the key leadership role he played in the program’s creation.

In an effort to help more students afford higher education, Reed and Whitehouse recently teamed up with Senators Maize Hirono (D-HI) and Patty Murray (D-WA) to introduce the Pell Grant Preservation & Expansion Act.  The legislation would increase the maximum award for low-income students,  ensure that awards keep pace with inflation, and make other improvements to expand and permanently safeguard the Pell Grant program.

“Congress needs to take proactive steps to help make college more affordable for working families and strengthening Pell grants is part of the equation.  Pell grants can be the difference between students staying in school and getting their degree or dropping out.  The Trump budget fails students and society because it would effectively decrease funding for Pell grants by nearly $4 billion,” said Senator Reed.  “The Pell grant is the foundation of our federal financial aid programs.  But over the years, we have seen an erosion of that foundation.  College costs have outstripped the Pell Grant.  In 1976, the maximum Pell Grant covered roughly 72 percent of the cost of tuition and fees and room and board at a four-year college.  Today, it covers less than 30 percent of those costs.  Clearly, we need to increase the Pell Grant.  However, we also need to take other steps to ensure that college is affordable for all.  We need states to do their share.  We need institutions to step up as well.  And we need students, families, employers, and community leaders to help create the political will for investing in education.”

“Pell Grants once helped lift a generation into the middle class by covering nearly the entire cost of attending a public university,” said Senator Whitehouse.  “Now, Trump proposes cuts to higher education, even as the price of a college education has rapidly increased and the purchasing power of a Pell Grant has eroded.  Congress can’t let Trump add to the burden on middle class families paying for college.  Instead, we should renew the noble vision of the late senator from Rhode Island that all students can afford a college education.”

The maximum Pell Grant for the 2017-2018 academic year will be $5,920, an increase from last year’s maximum grant of $5,825.  Under President Trump’s proposed budget for FY2018, there will be no increase to this maximum grant.  Additionally, President Trump’s budget would blow a $3.9 billion hole in Pell grants during the 2017 academic year, along with cutting funding for the Federal Work Study Program by nearly 50 percent to $500 million; cutting the TRIO Program by nearly $142 million; and cutting GEAR UP by over $120 million, all of which help disadvantaged students pay for college.  The budget would also eliminate the $733 million Supplemental Educational Opportunity Grant (SEOG), and would have dire impacts on student loans by eliminating the in-school interest subsidy for needy undergraduate students and the public service loan forgiveness for new borrowers.    

The Pell Grant Preservation and Expansion Act would:

  • Improve the purchasing power of Pell Grants: The maximum Pell Grant of $5,920 in 2017-2018 will cover just 29 percent of the costs of college at a public university, compared to 79 percent of those costs shortly after Congress created the grant 40 years ago. Under current law, the maximum Pell Grant will also remain fixed at this level in Fiscal Year 2018 with no future inflationary increases, which would further erode the purchasing power of the grant. This bill would provide an immediate $500 increase to the maximum award and grow the value of the Pell Grant over time by permanently indexing it to inflation.
  • Shift the Pell Grant program to mandatory funding: By making Pell Grant funding fully mandatory, instead of subject to the annual discretionary appropriations process, this bill ensures that students can count on their Pell Grants being fully funded now and into the future. In particular, enrollment tends to spike during recessions when workers seek retraining and upskilling, often leading to devastating exclusions from eligibility and other short-sighted changes to financial aid policy. Mandatory funding will ensure that the Pell Grant program is stable even during tough economic times.
  • Reinstate Pell Grant eligibility for defrauded students: This bill would reset the clock on a student’s Pell Grant eligibility if they were defrauded as evidenced by successfully asserting a borrower defense, including many former Corinthian College students.
  • Allow DREAMers to afford college: Undocumented students who were brought here as children are unfairly forbidden from accessing federal financial aid. This bill would extend Pell Grant eligibility to DREAMers, help these students continue their education, and allow our diverse society to benefit from their enormous talents and potential.
  • Extend Pell Grant eligibility to high-quality, short-term job training programs: This bill would allow students in short-term job training to be eligible for Pell Grants if they participate in a career pathway program leading to an in-demand, industry-recognized credential. It is important that students and workers have the option to pursue short-term programs to gain the training, skills, and credentials that are in high demand in their local or regional labor market, and that prepare them for professional licensure or certification.
  • Move the Iraq & Afghanistan Service Grant into the Pell Grant program: By moving this program for children of fallen military servicemembers who died in the line of duty in Iraq or Afghanistan since 9/11 into the Pell Grant program, it safeguards a recipient from more than $400 per year in cuts to their grant as a result of the sequester.
  • Increase support for working students: This bill reduces the “work penalty” that many students face when working to support themselves and offset rising college costs. By enacting a 35 percent increase to the income protection allowance (IPA) for working students, this bill will shield more of their income from any offset to financial aid.
  • Allow very low-income students and families to qualify for full Pell Grants: This bill fully reverses cuts to the income threshold at which a student receives a zero dollar expected family contribution (EFC) back to $34,000, which is where the level would have grown to if cuts had not been made in 2011. This change will streamline the financial aid process for the poorest students and ensure they can easily access a full Pell Grant.
  • Increase Pell Grant lifetime eligibility to 14 semesters: Too many students exhaust their Pell Grant eligibility before they are able to complete their program, often because their credits didn’t transfer, they had to care for family members, or even when they attended fraudulent institutions. This bill extends eligibility from the current 12 semesters to 14.


Press Contact

Meaghan McCabe, (202) 224-2921