An analyst says Congress 'knowingly' underfunds Pell Grants.

Congress’s latest omnibus spending bill will effectively eliminate federal Pell Grant funding for an estimated 143,000 low-income college students starting in July. The Pell Grant cuts come just a month after budget estimates showed the popular program would run a surplus in 2012.

The Republican-controlled House of Representatives and the Democratic-controlled Senate passed a $1 trillion spending measure Dec. 19 that included major changes to Pell Grant eligibility.

Students who take more than six years to earn a college degree no longer will qualify for Pell Grant money, meaning 63,000 recipients will have to look elsewhere for tuition. The former eligibility cap was for students who had taken nine years to finish school.

The Congressional changes also will eliminate Pell Grant awards of $277 to $550, and students without a high school diploma or GED will not receive Pell funding, even if they pass the “ability to benefit” test once used to secure Pell Grants. That provision alone will remove 65,000 students from the Pell Grant program.

The changes to Pell Grant qualifications will “blindside” students when they go into effect July 1, said Rich Williams, higher-education advocate for the U.S. Public Interest Research Groups (PIRG), which published a report on the impact of the Pell Grant shifts.

“At a time when student debt is at an all-time high, Congress has failed to deliver on an agreement [that] helps struggling students pay for college and make it to graduation,” Williams said.

The Congressional bill also reduces the income level under which a student will be eligible to receive the maximum Pell Grant amount, from $30,000 to $23,000, and it eliminates a six-month grade period on federal student loan payments.

Congress’s tightening of Pell Grant eligibility comes a month after federal budget numbers showed that Pell Grants had been slightly overfunded for the fiscal 2012 year.

This proved a marked difference from recent years, when lawmakersknowingly underfunded the program, throwing fuel on the Pell Grant funding fire,” according to the New America Foundation’s Higher Ed Watch, which tracks federal education policies.


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