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SPIN METER: College aid outpaced by college costs

SPIN METER: College aid outpaced by college costs

AP via Yellowbrix

August 28, 2009

If college tuition is increasing faster than grants, students may be forced to take on more loan debt, which could have a negative impact on their access to college, industry analyst Mark Kantrowitz said. Kantrowitz argues for doubling the Pell Grant and then indexing it so it grows along with inflation.

Under the bill, Pell Grants would rise slightly more than inflation over the next decade, increasing on average by about 2.6 percent yearly, according to the bill’s sponsors. It’s the first time lawmakers have ever agreed to a long-term annual increase in the program. Pell Grants have always depended on annual spending bills and on occasion have stayed flat or been cut when lawmakers came under pressure to cut spending.

But the increase Congress is prescribing is less than half the 5.6 percent average yearly increase of Pell Grants over the life of the program. During that time, college tuition has risen more than 7 percent annually.

And the bill’s increases may be illusory. They would still depend on whether Congress provides the money to fund them in its annual spending bills.

“It still opens up the possibility of a false promise,” said Kantrowitz, publisher of the FinAid.org Web site and the FastWeb.com scholarship search engine.