Federal bill would cap Pell Grants at $4,050 per student

Despite rising tuition costs, Congress is considering capping the amount of federal grants that students receive for the third straight year.

Last Saturday, Congress approved a $388 billion spending bill to go toward research and financial aid. In the bill, Congress limits Pell Grants to $4,050 per eligible student per year.

The bill will now head to the House of Representatives for a second vote, then to the desk of President Bush, who has given early indications that he would approve the bill.

"We weren't expecting much of an increase in the amount for Pell Grants," said Kay Lewis, director of student financial aid at the UW. "We would have preferred to have one, especially with the rising costs for students to be in college."

Pell Grants make up the largest federal student grant program and are offered only to undergraduate students. The amount of money dedicated to Pell Grants for the projected 2005-06 academic year is $18.4 million in Washington with an estimated 6,900 recipients.

The bill provides an overall increase of $458 million from the 2004 fiscal year, increasing the total amount to $12.5 billion, but this amount falls $365 million short of that approved by committees in the House and Senate. Lewis does not figure that this increase will have an effect on students.

"This increase actually ends up being a short fall. In the end it will end up costing more for with the across-the-board cut, and it will not be enough to allow for a raise in the grant amount," she said.

The bill allotted the Perkins Loan Program $66.7 million toward reimbursing colleges for loan cancellations, less than the $165 million the Senate Appropriations Committee proposed. The extra amount was intended to go toward helping colleges make new loans.

"The Perkins Loan Program is especially important because the money goes toward especially needy students. Although the money is recycled through the years with repayments, the overall amount is $700,000 less than we wanted to build up the program and make new loans," said Lewis.

The Perkins Loan Program has an estimated $15 million on hand to disperse to approximately 4,500 students at the UW for the 2005 academic year.

The bill does not prevent any revisions to the formula used to determine eligibility for financial aid. The UW determines this by the amount of state taxes a student pays. In theory, the Bush administration would change the formula to make thousands of students ineligible for Pell Grants.

Lewis is not particularly worried, though, since the bill is not yet set in stone.

"Students shouldn't worry about deciding whether to apply for financial aid until the eligibility is determined. Until then, students are urged to continue to apply for financial aid," she said.