If you thought that your chances of getting federal funding or grants for college where hard before then get ready because things may be about to get a whole lot worse. In the current debt crisis we’re experiencing all government spending (including that of Pell grants for students) is being closely examined. If the Republicans have their way then the Pell grant program will experience cuts making it even harder to receive to be accepted into the program.
At the moment the vast majority of recipients of Pell grant funding come from families whose total combined income is less than $40,000 a year. Close to half of all African American undergraduates are currently subsidizing their college fee’s with Pell grant funding and 40% of all Latino undergrads are doing the same. For most, a Pell grant is a very useful way to reduce the amount of money you have to borrow to pay for college fees, even at its maximum payout it’s rarely enough to pay for everything.
Federal Pell grants for students are hugely popular. Next year the program will administer about $35 bn to just under 10 million students in the U.S as a way to offer help to those who wish to continue onto further education but lack the necessary financial means to do so. It could be that the program will now be restricted with tighter student eligibility criteria being applied to the application process and a reduction in the maximum amount a student could receive under the scheme.
Students and some politicians are fiercely protective of the Pell grant scheme and while its immediate future looks secure the planned increases on the maximum amount which can be awarded for 2013 – 2017 look now very unlikely to happen. It is said the the program will make a loss of $1bn for 2012 with the gap becoming ever wider should the economy not improve. With this kind of pressure the government could be forced to tighten restrictions and reduce the maximum amount the grant can pay out.
The program has a long history starting some 30 years ago. Of course the great advantage is that you don’t have to pay any money received through a student Pell grant back making it a grant in the truest sense of the word. Most students combine various school loans, federal loans and grants together in order to reduce or even eliminate completely the need to get private loans from a traditional mainstream lender. The last thing any college graduate wants is to get out of college neck deep in debt so it’s critically important that you take full advantage of any help you can get and claim anything you may be entitled to.
In further bad news from the recent debt deal graduates won’t be able to subsidize their federal student loans any more. Traditionally this has been a way of keeping your borrowing to an acceptable level simply because the government wouldn’t charge interest on the amount while students where actively studying in school. This is due to come into place in July next year meaning that graduates will probably be leaving college with more debt than ever before.