Although President Barack Obama’s proposed reductions to the Federal Pell Grant Program will eliminate summer grants for low-income college students, Duke undergraduates will likely see minimal effects from the government cuts.
In its budget proposal for 2012 released Monday, the Obama administration recommended eliminating the summer grants to avoid lowering the maximum allowance of $5,500 for recipients during the academic year. Alternatively, Republicans from the House of Representatives have proposed a spending bill that would cut the maximum grant by 15 percent, or $845.
Changes to Pell grants should not have an impact on the financial aid packages of Duke recipients, Alison Rabil, assistant vice provost and director of financial aid for the University, wrote in an e-mail Feb. 17. Rabil said that 12 percent of all Duke students and 29 percent of all grant aid recipients at Duke—a total of 810 students—received Pell grants for the 2009-2010 academic year. But even though the policy would affect the University’s financial aid budget, Duke would not ask students to pay more to attend school.
“Students receiving Pell grants will not see a change to their total grant dollars in their financial aid packages,” Rabil said. “As Pell grant dollars go down, Duke grant dollars go up. Net-net, it’s even from the student perspective.”
Due to the weak economy, the number of recipients of the program has grown by an estimated 52 percent between 2008 and 2011, Sara Gast, a public relations specialist at the U.S. Department of Education, wrote in an e-mail Feb. 16. She added that the discretionary costs have more than doubled during the same time period.
“These proposed changes are difficult but necessary to ensure the fiscal integrity of the program,” Gast said.
The Higher Education Opportunity Act of 2008 created the “year-round” Pell Grant in order to allow students on an accelerated path who are taking classes during the summer to receive a second grant in addition to the traditional grant during the academic year. Since its inception, however, the grants have been criticized for being costly and ineffective.
“There is no evidence that this policy has succeeded in causing more students to accelerate their degree completion, and it costs the taxpayers 10 times more than originally estimated,” Meg Reilly, deputy associate director for communications and strategic planning at the White House’ Office of Management and Budget, wrote in an e-mail Feb. 17.
Gast noted that the creation of the additional grant for summer study has added $4.2 billion in costs, a much higher figure than either the Obama administration or the Congressional Budget Office estimated. If left in place, the summer grant would add approximately $8 billion in costs for the 2011 and 2012 fiscal years.
Gast said if summer grants were to continue, the program would see $20.7 billion of accumulated shortfalls by 2012.
Jacob Vigdor, professor of public policy and economics and an expert in education finance, said he predicted that the reduction will have less of an impact on private institutions such as Duke than on public universities or community colleges.
“The impacts of these proposals won’t really reverberate at institutions like Duke, which have the institutional resources available to blunt the impact of these cuts,” he said. “At community colleges, where the federal aid represents a huge portion of their total revenue... there is a much clearer concern.”
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