Bush’s ‘08 budget will seek raise in Pell grants

RALEIGH, N.C. – President Bush’s 2008 budget will include a proposal for the biggest increase in Pell grants for low-income college students in three decades.

Education Secretary Margaret Spellings said Thursday that the budget will contain a proposed increase of $550, to a maximum award of $4,600. That would exceed the $260 increase passed Wednesday by the House.

Democrats have introduced a proposal in the Senate, currently before committee, that calls for an immediate increase to $5,100.

All told, low-income students seem likely to get their first increase in maximum Pell awards in five years. But education advocates warned that they’re unsure how the increase would be funded, and caution it could come at the expense of other financial aid programs.

“If this represents an actual increase in total need-based student aid, it will be great news,” said Terry Hartle, senior vice president of the American Council on Education, an umbrella group of colleges and universities. But if supplemental grant programs are cut, “it’s quite possible … individual students could be less well off.”

Spellings said the Pell increase would be paid for with increased revenues and “efficiencies” that she declined to specify, saying details would be released with the president’s budget announcement Monday.

The grants – which students don’t have to pay back – are the federal government’s main direct financial aid program for low-income families.

But as college costs have skyrocketed, the grants’ buying power has eroded sharply. Twenty years ago, maximum Pell grants covered about 60 percent of the average published price of attending a public four-year university, according to figures in a report last year by the College Board. In 2005-06, the maximum grant covered just one-third of that cost.

Democratic Sen. Edward Kennedy, who chairs the committee overseeing education issues, issued a statement calling the announcement a “welcome development” that “shows how a Democratic Congress is changing the nation’s priorities.”

Bush had proposed a $100 increase in the value of maximum Pell grants in his 2006 budget, but no increase was passed by Congress that year.