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In September, Senate budget writers advanced a federal budget plan for FY12 protecting the $5,550 maximum Pell Grant award, but found the funding to do so by eliminating the subsidy on interest accrued during the six-month grace period on undergraduate loans. A draft House plans looks for savings in the Pell program itself.

House appropriators twice postponed scheduled markups of the FY12 Labor, Health and Human Services, and Education appropriations bill. However, in late September, Representative Denny Rehberg (R-MT), the Chairman of the House subcommittee that oversees the bill, released draft legislation that would also protect the $5,550 maximum award, but it calls for several programmatic changes. His draft would:

  • Eliminate eligibility for less than half-time students;
  • Eliminate eligibility for awards that are less than $555;
  • Reduce Pell use from 18 semesters to 12 starting July 1, 2012;
  • Reduce zero Expected Family Contribution from $30,000 to $15,000; and
  • Expand the definition of “untaxed income” to include five items that are currently not included as income:
    • the amount of additional tax credit claimed for tax purposes;
    • welfare benefits;
    • earned income credit claimed for tax purposes;
    • credit from tax paid on special fuels; and
    • untaxed social security benefits.

The House proposal also significantly reduces or eliminates funding for Historically Black Colleges and Universities, Hispanic-Serving Institutions, and Tribal Colleges. GEAR UP, Federal TRIO Programs, Supplemental Educational Opportunity Grants and Federal Work-Study would be level-funded. It would also prevent the Obama Administration from implementing and enforcing the Gainful Employment rule and the definitions of Credit Hour and State Authorization.

These numbers are not final and the Republican-led House and the Democratic-controlled Senate must find common ground before sending final FY12 spending legislation to President Obama in what will likely be an omnibus appropriations measure. The new federal fiscal year actually began on October 1; the federal government is currently funded through November 18 on a temporary measure. None of the twelve annual appropriations bills have been completed.

For more, see:

Republicans Push Pell Changes
Inside Higher Ed

House Republicans Seek to Eliminate 31 Education Programs and Tighten Pell Eligibility
The Chronicle of Higher Education


Liz Clark

Vice President, Policy and Research


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