Pell Grants get funding boost from stimulus package

BY BENJAMIN S. CHASE
Daily Staff Reporter
Published February 11, 2009

Much of the attention surrounding the federal economic stimulus package has focused on the benefit it will provide for large, struggling institutions, like national banks and domestic automakers.

However, the effects of the stimulus package could soon be felt by thousands of students here at the University of Michigan.

When Congress passed President Barack Obama’s $787 billion American Recovery and Reinvestment Act on Friday, the Federal Pell Grant Program —federally funded scholarships for students with demonstrated financial need — received a significant boost in funding.

For the 2007-2008 academic year, 3,349 University students received Pell Grants, totaling over $9 million in aid with each student receiving an average of $2,776, according to Margaret Rodriguez, senior associate director of the Office of Financial Aid.

The bill proposes changes to the program that could increase both the number of students who receive grants and the amount of money students receive.

The federal government grants between 5 and 6 million scholarships through the Pell Grant program each year. That number, and the number of applicants for the grants, has increased every year since 2005, according to the U.S. Department of Education.

Federal funding for the Pell Grant program has fluctuated over the past several years, from $12.35 billion in 2005 to $17.34 billion in 2006, according to the U.S. Department of Education. In 2008, funding for grants was $16.26 billion.

The increases in funding per grant are modest under the bill. But, the bill includes provisions for more substantial increases the future.

Calling for an additional $13.869 billion to be allocated for Pell Grants in the 2009 and 2010 fiscal years, the stimulus package will permit an increase of $281 in individual grant money for 2009-2010 and $400 for 2010-2011.

Additionally, the bill will increase the maximum amount for individual grants to $5,012. The maximum grant size for the 2008 fiscal year was $4,731.

These funding increases come at a time of need for students and families struggling to afford the rising cost of higher education.

“Giving more students an opportunity to obtain a college degree is a smart, long-term economic investment that will help us prepare the next generation of workers for high-tech jobs,” said Rep. Mark Schauer (D-Battle Creek).

Sen. Carl Levin (D-Mich.) addressed the issue of Pell Grants and higher education funding as a part of the federal economic recovery package in an address given on the floor of the Senate last week.

“The bill adds $13.9 billion to increase the Pell Grant maximum award and pay for increases in program costs resulting from increased eligibility and higher Pell Grant awards,” Levin said, “which will help 7 million students pursue postsecondary education.”

In an e-mail statement last week, Sen. Debbie Stabenow (D-Mich.) wrote that investments in higher education funding and, in particular, in programs like Pell Grants, are critical to the long-term viability of the nation’s economy. She wrote they also provide more immediate relief for families burdened by the cost of college tuition.

“There is no question that families throughout our state are struggling to make ends meet,” Stabenow wrote. “The crucial investment in Pell Grant funding in the economic recovery package will provide much-needed financial assistance for students trying to afford college and technical training during these difficult economic times.”