Washington, D.C. — Today, the Center for American Progress released an issue brief that examines how necessary increases in funding for the Federal Pell Grant Program combined with forced austerity through sequestration imperil spending for key social programs. Without undoing these spending caps and making Pell Grants a mandatory program, Congress will be forced to choose between funding the nation’s key college investment in low-income students or other crucial programs. And if proposed limits in fiscal year 2016 spending bills are ultimately enacted, then the situation will become even more dire.
Today, Pell Grants provide more than $31 billion each year to help more than 8 million low-income students afford postsecondary education. Unlike other discretionary budget items, the Pell Grant Program does not rely on a maximum award size but instead offers grant money to all students who meet eligibility requirements. The combination of high numbers of eligible students and low overall spending limits means that in many future years, Pell Grant spending may require most if not all additional money available for the U.S. departments of Education, Labor, and Health and Human Services, or LHHS. That is in many ways the best case scenario. The current Congress is proposing to drop spending even further; if enacted, these cuts would result in years where funds needed for Pell Grants would exceed all available new money for those agencies.
Instead of cutting funds for low-income students in need of Pell Grants or from other LHHS departments, Congress should make the Pell Grant Program part of mandatory—not discretionary—spending. Other large federal student aid programs—such as Stafford Loans—are already funded through mandatory money, and moving the Pell Grant Program to the mandatory side of the budget would stabilize its funding and remove the necessity to pit Pell Grants against other domestic priorities.
“If allowed to stand, these spending caps will force appropriators in future years to choose between maintaining the investment in postsecondary education for low-income students and cutting crucial programs for preschoolers, displaced workers, or medical research,“ said Ben Miller, Senior Director for Postsecondary Education at CAP and author of the issue brief.
In order to continue providing low-income students access to higher education, the issue brief released today suggests two important actions for Congress:
- Congress must undo sequestration-enforced spending caps so that federal investment can return to the higher levels previously agreed upon by Congress. This would provide much-needed relief to the appropriations process and would lessen the need to choose between funding the Federal Pell Grant Program and other domestic priorities.
- Congress must acknowledge that the Pell Grant Program is ill-suited to remain a discretionary program. Moving the Pell Grant Program to the mandatory side of the budget would stabilize its funding over time and would remove the major spending shocks it is currently subject to due to increased college enrollment.
Click here to read “Capped Out: Low Spending Limits, Pell Grants, and the Future of Labor and Health and Human Services Appropriations.”
For more information on this topic or to speak with an expert, contact Allison Preiss at email@example.com or 202.478.6331.