House GOP Budget Slashes Billions From Pell Grants, Bumps Millions Of Students Out Of The Program

The budget that House Budget Committee Chairman Paul Ryan (R-WI) released today would gut the social safety net as we know it, dismantling Medicare and Medicaid, even as it cuts taxes for the wealthy and corporations. It doesn’t ask the most well-off Americans or the country’s corporate titans to make any sacrifice, instead leaving the burden of deficit and debt reduction on the middle-class.

The budget lays out little in terms of cuts to specific programs, instead simply decreeing caps on levels of spending. But one cut is explicitly proposed in the document — a cut to the Pell Grant program, which provides college tuition assistance to low-income students. Here’s what the budget plan has to say on Pell Grants:

Return Pell grants to their pre-stimulus levels to curb rising tuition inflation and make sure aid is targeted to the truly needy…This budget takes the necessary next steps to ensure Pell spending is brought under control and targeted to the truly needy instead of being captured in the form of tuition increases.

While the cut is presented in vague language, the practical implications are:

— Eliminating only the Recovery Act Pell Grant funding amounts to a $17 billion cut, while returning to the 2008 level cuts another $9 billion;

— The maximum grant would be cut by $845 (15.2 percent);

1.7 million currently eligible students would be rendered ineligible for grants.

If implemented, this would be the largest reduction in Pell Grants in history, more than eight times higher than the previous record, which was a $100 reduction in the maximum award in 1994. These cuts “will reduce the number of low income students receiving Bachelor’s degrees each year by about 61,000.”

Ryan justifies this cut by claiming that “recent studies have demonstrated that increases in Pell grants appear to be matched nearly one for one by increases in tuition at private universities.” The citation for this claim is a 2005 study (not exactly recent), which says that, while private universities have increased tuition alongside increases in Pell Grants, “we find little evidence that increases in federal Pell grants are positively linked to increases for in-state tuition at public universities.” As of 2009, far more Pell recipients attend public universities than private.

Pell Grants are key to the country’s economic competitiveness and to boosting an educational attainment rate that has stagnated. Cutting them in this way provides little in terms of real budgetary savings, but undermines economic competitiveness and the nation’s supply of human capital.