Education: College tuition aid would increase

THURSDAY, FEB. 26, 2009

Available details of President Barack Obama’s proposed government spending for the 2010 budget year that begins on Oct. 1. A more extensive budget outline is expected in April. In most cases, the figures are for discretionary spending and do not include mandatory entitlement programs like Social Security. The percentage change is based on what Obama wants to spend next year compared with what he anticipates the government will spend in 2009 once Congress completes appropriations for this year.

Agency: Education

2010 proposal: $46.7 billion

Change from 2009 estimate: 12.8 percent increase

Highlights: Obama is calling for a huge expansion of the government’s role in making college more affordable and putting it within reach of more kids.

In his budget proposal to Congress, Obama seeks to tie the Pell Grant program to inflation for the first time since it began. The Pell Grant program would grow by more than 75 percent over the next decade.

And in a proposal sure to rile the nation’s lenders, Obama seeks to end government-guaranteed loans and to boost the government’s own direct lending in an effort to insulate students from turmoil in financial markets.

Such a move would end a long-standing partnership between the government and the private sector — a partnership that has begun to crumble in recent months under the weight of the credit crisis.

Government-subsidized loans currently dwarf the direct loans. The subsidized program provided $56 billion in loans to around 6 million students last year. The government’s direct loan program provided $14 billion in loans to 1.5 million students.

Lawmakers have struggled to keep Pell Grants growing, frequently failing to increase the size of the grants even as college costs soared.

Obama proposes to take Pell Grants out of lawmakers’ hands, giving the program a mandatory stream of dollars like Social Security and Medicare, and to index Pell Grants to the annual inflation rate.

Pell Grants mostly support students from families earning under $30,000 a year.

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