Pell Grant recipients may not receive promised funds

By: Cuong Nguyen

Posted: 10/9/08

With the financial crisis plaguing the nation's economy, an increasing number of college students are seeking financial aid from the federal government, causing Bush administration officials to warn Congress that $6 billion in additional taxpayer money is needed to fund the nation's most important federal aid program, the Pell Grant.

Created in 1972, the Pell Grant has long been the most important form of financial aid for millions of low-income students, whether they be recent high school graduates or older middle-class workers, who rely on these grants to afford higher education. According to Hopkins Student Financial Services, 534 students from the freshman class received Pell Grants, a 6.5 percent increase compared to the class of 2011.

"I think it is safe to say the increase in the number of Pell Grant recipients is a reflection of the worsening overall economy," Director of Student Financial Services Vincent Amoroso said.

Pell Grants are only available to the most need-based students. According to Ellen Koontz Ostendorf, associate director of student financial services at Hopkins, nine out of 10 recipients who receive the federal grant have family incomes of $40,000 or less. But due to the declining economy and increasing unemployment rate, the number of students seeking federal aid is rapidly growing.

Thomas Skelly, director of budget services, told lawmakers that both the number of recipients and the costs of tuition have significantly increased in the past two years. In fact, in a memorandum detailing the problem to lawmakers, Skelly wrote that more than 800,000 prospective students applied for federal grants compared to last year.

The memorandum indicated that in the first half of 2008, about nine million students nationally applied for financial aid; a 16 percent increase from last year.

The number of Hopkins students applying for aid also increased.

"We anticipate an increase in the number of students and families seeking some type of financial assistance from us whether it is in the form of loans, grants, work study or scholarships. The state of the economy has a direct impact on many families' ability to pay the associated cost of sending their son or daughter to college," Amoroso said.

The annual report by the American Council of Education, which represents colleges and universities on education issues and public policy, states that more nontraditional students such as older learners are returning to college to improve their job skills during the economic decline, triggering an increase in demand for Pell Grants.

Ryan Novencido, a 30-year-old construction worker who dropped out of high school, is one such student.

"I don't make enough money with my current job. I probably couldn't have afforded my textbooks and tuition without my Pell Grant," he said.

Novencido now uses his grant to study computer science at Community College of Baltimore County.

"A rule of thumb is that if the economy is bad, college enrollments go up and vice versa," Frederick Community College Vice President for Planning, Marketing and Assessment Craig Clagett said.

Congress recently raised the value of the maximum Pell Grant from $4,241 to $4,310 due to the increased need in the main federal grant program for low-income college students.

"There are numerous things happening right now in the United States. Because more people are going to college and applying for financial aid, more people who qualify for Pell Grants are showing up on campuses," Skelly wrote.

The Department of Education calculates that the funding for Pell Grants for the 2009 fiscal year will reach $20.2 billion compared with $14.2-billion budget in 2008.

Initially, Congress allocated $14.2 billion for the federal grants for the current fiscal year. But because of the increase of incoming students and rising shortfalls of previous years, Congress must either add $6 billion in new funds for the next fiscal year or cut the size and appropriation of grants.

If Congress decides to add the $6 billion in new funds, it would increase the funding by 40 percent, the largest yearly increase in federal aid since its conception.

"Congress underestimated the increase of students who would need federal financial aid this year. There's more unmet than anyone predicted," Associative Executive Director of the American Association of Collegiate Registrars and Admissions Officers Barmak Nassirian wrote in an e-mail.

It is unlikely, though, that Congress will reduce the funding for Pell Grants or cut the size and appropriation of the federal grant due to its nationwide popularity.

"Pell Grants open the door to higher education for millions of low-income students. Many of them rely on the grant [to achieve] a higher education and a better standard of living. If Congress threatens to cut funding for Pell Grants, I guarantee that many of my fellow politicians and I won't stay quiet," Maryland Congressman Elijah Cummings wrote in an e-mail to the News-Letter.

The office of Maryland House Representative Christopher Van Hollen, a strong supporter of increasing funding for Pell Grants, reiterated that Van Hollen, "is committed to ensuring that Pell Grants and other federal aid programs do not decrease in the future."

Even though Congress has increased the funding for Pell Grants last year, the portion of college costs that it covers has dwindled.

Information from the College Board Web site indicates that in 1987 to 1988, the maximum Pell Grant covered half a year's study at an average public four-year college.

Last year, however, the maximum Pell Grant only covered a third of the cost.

The students most affected by the fate of Pell Grants are those who attend public four-year colleges and universities. Many community colleges are currently experiencing record enrollments due to the stagnant economy.

"It sucks when you're unemployed but, hey, what can you do? I could either find a less-paying full-time job or take a couple of part-time jobs, go to school, and hopefully find a better job with my new degree when the time is right," full-time CCBC student Joey Matteson said.

Following the national trend, enrollments at the Community College of Baltimore County were 20 percent higher than last year, and President Sandra Kurtinitis said she expects a 13 percent increase of full-time students by next semester.