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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

Experts say that to truly make a difference, lawmakers would need to make Pell Grants an entitlement, like Social Security and Medicaid, to end the program’s dependence on the annual spending process. In fact, that’s what Obama asked Congress to do in his budget proposal.

Doing so would make Pell Grants a lot more predictable. And if grants were very predictable — if a student knew in middle school that a certain amount would be waiting for her — it could have a significant impact on college enrollment, said Baum, a senior policy analyst for the College Board.

But it also would be costly and very difficult to pass amid exploding federal deficits. The White House budget office estimated the cost of an entitlement to be $117 billion over the next decade. On Tuesday, the office said the cost would actually rise much higher, by an additional $27 billion, because more people than anticipated are going back to school and demand for Pell Grants is soaring amid the crippled job market.

Lawmakers don’t have that much to spend. They have $87 billion, an amount they came up with by proposing to have the government take over all federal student loans and end subsidies for private lenders.

That amount is not enough to pay for an entitlement. But it would be more than enough to tie Pell Grants to inflation. That carries a $40 billion price tag, leaving Congress with an extra $47 billion to spend.

Miller has spread the extra money across an array of programs that are attractive to members of Congress and will attract support for the bill, including many that have nothing to do with higher education. New preschool programs, for example, would get $8 billion. An additional $5 billion would go for construction at elementary, middle and high schools and community colleges. The bill would also send $10 billion back to the federal Treasury.

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