Federal bill cuts Pell Grants for about 100,000 students nationwide

Pell Grants will be cut for an estimated 100,000 students nationwide as part of a nearly $1 trillion federal omnibus appropriations bill passed into law Friday.Amid a flurry of end-of-year Congressional activity, President Barack Obama signed a legislative compromise that tightens eligibility requirements for Pell Grant recipients while keeping the maximum grant amount at $5,550.

Pell Grants are a form of federally funded financial aid aimed at helping low income students afford the cost of college. The grant sizes range from $555 to $5,550, and over 9 million students across the nation received grants in 2011, according to the U.S. Department of Education website.

Under the new legislation, the grants can only be used for 12 semesters rather than 18 semesters, as in the past. Additionally, the highest annual income level under which a student would automatically receive the maximum grant amount drops from $30,000 to $23,000.

The University of California has been a major beneficiary of Pell Grant funding. In 2010, 40 percent of all UC undergraduates were eligible for Pell Grants and UC students received a total of $286 million. Nearly 80 percent of UC Pell Grant recipients graduated within six years, according to a letter sent by UC President Mark Yudof and UC Student Association President Claudia Magana to Congress members representing California.

The changes to the eligibility criteria come as spending on the program has nearly doubled in the past two years while the number of participating students has increased by nearly 3 million. The reforms to the program are expected to save more than $11 billion over the next 10 years, according to the Congressional Budget Office.

Rich Williams, the higher education advocate for the U.S. Public Interest Research Group, said in a statement that Congress is “blindsiding about 143,000 students next year.”

“At a time when student debt is at an all time high, Congress has failed to deliver on an agreement which helps struggling students pay for college and make it to graduation,” he said in the statement.

Magana said the changes would be especially problematic for UC undergraduates because “the UC keeps raising tuition.”

However, the finalized legislation avoids a number of previously considered restrictions that would have eliminated the grants for 1 million students, said Terry Hartle, senior vice president of the American Council on Education in an interview with The New York Times.

“We had to make some very painful cuts in this bill to meet our allocation,” said Sen. Tom Harkin, D-Iowa, a member of the Senate Committee on Appropriations, in a statement to The Huffington Post. “So I am very pleased we could minimize the damage in education, maintain the maximum Pell grant award and actually provide some increases for Head Start, Title I, special education and Promise Neighborhoods.”

Curan Mehra covers higher education.