Changes likely as Pell Grant faces budget shortfall in 2014 fiscal year
- Though the Pell Grant is safe through the 2013 fiscal year, Congress will face two other financial aid funding crunches in the next 18 months.
- The program will face a budget shortfall of $5.7 billion after part of its mandatory funding expires at the beginning of the 2014 fiscal year, and higher education lobbyists say past budget gaps have already claimed most of the "low-hanging fruit" for cutting costs in Pell and other financial aid programs.
- Additionally, the interest rate for subsidized student loans is set to double to 6.8% on July 1, and most expect that changes will be made to the Pell program, as a scenario where the interest rate is once again kept at 3.4% and the Pell shortfall is filled is probably unlikely.
From the article:
It’s been a nail-biting few years for Pell Grant advocates, as Congressional budget crisis after Congressional budget crisis raised the specter of deep cuts to the major federal financial aid program for low-income students. But the next 18 months for the program may be among the most difficult yet. The Pell Grant is safe from the “fiscal cliff” -- the combination of scheduled tax increases that go into effect in January, and mandatory spending cuts that take effect if Congress does not reach a long-term debt deal. But the 113th Congress, which takes office in January, will have to confront two other financial aid funding crunches in the next year and a half. ...
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