Debt deal spares Pell Grants, nixes aid to grad students
According to 140+ student body presidents, we now “have a deal” on the nation’s debt ceiling.
On Tuesday, both houses of Congress signed off on a measure that, in exchange for evading default and economic calamity, would immediately slash $1 trillion from the federal deficit and direct a new joint committee to find $1.5 trillion in additional cuts. They will temporarily spare Pell Grants with a three-year allocation of $17 billion.
Under the Obama administration, the maximum award under the program increased to $5,550. But this new award represents the smallest share [PDF] of the average college tuition in the program’s history.
Meanwhile, the debt deal eliminates subsidized loans for almost all graduate and professional students. Previously, student loans could not start accruing interest under after graduation. That will no longer be the case, and the CBO estimates that it will save the federal government $21 billion over ten years. Part of these savings will be used to keep Pell Grants afloat.
Image from National Education Association