Legislation To Increase Pell Grants Is Introduced In The U.S. House And The U.S. Senate

Legislation To Increase Pell Grants Is Introduced In The U.S. House And The U.S. Senate To Provide More Opportunities For African American And Low-Income Students To Earn College Degrees

S. 2374 / H.R. 4902 WOULD INCREASE INDIVIDUAL MAXIMUM FINANCIAL AID AWARDS BY UP TO $4,040 AND RESTORE YEAR-AROUND AWARDS

Pell Grants are awards provided by the Federal government on a need-based  basis to low-income undergraduate and certain postbaccalaureate students in order to promote access to postsecondary education.  Unlike student loans, Pell grants do not need to be repaid, and are thus increasingly important as student debt is a growing reality for too many Americans.  Need-based grants such as Pell grants increase college enrollment among low-and-moderate income students, and Pell Grants make post-secondary options possible for millions of Americans.  Furthermore, they are utilized disproportionately by racial and ethnic minority students:  more than 60% of African-American undergraduates and half of Hispanic undergraduates rely on Pell Grants to attend school. Nearly nine million Americans overall depend on Pell Grants to attend and complete college.  Research has shown that need-based grant aid, like Pell Grants, increases college enrollment among low- and moderate-income students and reduces their likelihood of dropping out.

Furthermore, a college education is increasingly important:  Young adults with only a high school diploma are almost 3 times as likely to be unemployed, and earn less than three-fifths as much as those with a bachelor’s degree.

Despite this obvious need for Pell grants, over the last five years Congress has approved their diminishing capacity.  As recently as in the 1980s, the maximum Pell Grant covered more than half the cost of attending a four-year public college.  In the next school year, however, the maximum Pell Grant ($5,730) is expected to cover less than one-third of the cost of a public 4-year college—the lowest purchasing power level since the start of the program.  As a result of the decreasing power of the Pell grant, grant recipients are already more than twice as likely as their non-Pell peers to have student loans (61% vs. 29%). 9 out of 10 Pell recipients have additional student loans that are on average $4,750 more than their non-Pell peers. Compounding this problem is the increasing cost of college:  due largely to cuts in state education budgets, college tuition has grown by 50% from 2004 to 2014.

To address this problem, Senators Mary Landrieu (LA) and Maize Hirono (HI) and Congresswoman Loretta Sanchez (CA)  have introduced S. 2374 / H.R. 4902, the Middle Class CHANCE (Creating Higher education Affordability Necessary to Compete Economically) Act.  Specifically, S. 2374 / H.R. 4902 would increase the maximum Pell Grant award by $4,040, restore year-round awards so that more students may continue their studies in the summer, and increase a student’s Pell eligibility to 15 semesters so that it aligns with existing satisfactory academic progress regulations. These are critical improvements that will allow the Pell program to better accomplish its mission of helping low- and moderate-income students’ access to college.

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