President Barack Obama’s $3.6 trillion budget will tie federal Pell Grants to inflation for the first time ever. As part of Obama’s budget proposal on education, this adjustment will give low-income college students financial aid that will reflect the state of the economy and the value of the dollar.
Currently, the maximum grant awarded is determined by a Congressional vote and is not adjusted for inflation. The maximum award for Pell Grants will already increase from $4,730 to $5,550 for the 2010-11 school year due to the American Recovery and Reinvestment Act that Obama signed into law Feb. 17. The cap will then continue to increase over the years as inflation rises, according to the budget proposal summary on the official White House website.
The Federal Pell Grant Program supplies “need-based grants to low-income undergraduate and certain post-baccalaureate students to promote access to postsecondary education,” according to the U.S. Department of Education website. The size of the grant given to a student is determined by the Expected Family Contribution, which is calculated as part of the Free Application for Federal Student Aid.
Pell Grants are direct grants that are awarded through participating universities to students with financial need, according to the U.S. Department of Education website. There is also a proposal to make participation in the program mandatory, according to the budget proposal summary.
The Pell Grant increase will not be the only change made to financial aid, Student Financial Aid Services, Inc. spokeswoman Mary Fallon, said in an email. Student Financial Aid Services, Inc. is a private company that helps students and parents complete the FAFSA.
“There is more work-study money available,” Fallon said. “Plus [there is] the advantage of claiming a tuition tax credit increased to $2,500 for families who earn less than $180,000 a year.”
Pell Grants may be adjusted for inflation
Published: Monday, March 2, 2009
Updated: Monday, March 2, 2009
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