WASHINGTON — The Obama administration Tuesday proposed a $2 billion a year expansion of federal Pell grants to pay for year-round student awards and bonuses for students staying on track to graduate on time.
“We believe now that Pell grant has stabilized; these are manageable costs both in the short run and long run,” said Education Under Secretary Ted Mitchell.
The Department of Education’s two-part proposal would expand the grant program, now $30 billion, to allow low-income students to get Pell grants for a third semester of college each year; students now cannot get funding for summer sessions. It also would provide a $300 bonus each semester that students would take at least 15 credits. The Pell grant expansion will be a part of Obama’s budget proposal to Congress next month.
Many full-time students exhaust their grant money within two semesters, reaching the maximum $5,775 annual award while taking 12 credits per semester, the minimum needed to be considered a full-time student. This leaves no Pell money for summer courses or additional classes in a semester. Education Department officials said they want to encourage students to stay on track and graduate on time.
Year-round Pell grants were created under President George W. Bush, but were cut by the Obama administration and Congress in 2011. Policy experts support the move to reinstate year-round grants as a logical step to encourage college graduation.
“It just makes a lot more sense to allow people to go full-time year-round, and you need federal student aid policy that supports this,” said Jason Delisle, director of the Federal Education Budget Project at New America, a research group.
Nearly 700,000 students would get an average $1,915 in addition aid if the proposal is approved by Congress, according to the Education Department, and an estimated 2.3 million students would graduate faster and at a lower cost.
“We look forward to working with Congress to make these proposals a reality,” said acting Education Secretary John B. King Jr. in a teleconference Tuesday.
Response from the Senate and House education committees was favorable.
Sen. Lamar Alexander, chairman of the Senate Health, Education, Labor and Pensions Committee, welcomes support for year-round Pell grants, which he had proposed last year, an aide said.
Members of the House Education and the Workforce Committee support the increased aid and will work to ensure that it doesn’t increase taxes or hurt the long-term health of the program, said spokeswoman Lauren Aronson. “(We) hope this is one of the many areas Congress and the administration can work together to strengthen higher education.”
Mitchell said research by MDRC, an education and social policy research organization, on state education programs showed an increased likelihood of summer enrollment if students received a year-round scholarship that included summer term.
“The proposal is a good step forward,” said Alexander Mayer, a senior associate in MDRC. “It’s a nice way for students to maintain momentum.”
