Pell Grant Funding Cut Puts the Squeeze on Low-Income Students

This past year the Bush administration changed the formula that is used to calculate Pell Grant awards. The new formula does not credit families for the state and local taxes they pay, with the result that families are considered to have more available money to pay for college than they did under the old formula. At the time of the change, it was estimated that 89,000 students would lose their eligibility for Pell Grants altogether and many thousands more would have their grants reduced.

Now The College Board has confirmed that the change has resulted in sharply reduced government aid for low-income students, a group in which blacks are a disproportionate percentage. The College Board reports that total Pell Grant awards in the 2005-06 academic year were $12.7 billion. This is down from $13.6 billion the year before. This is a drop in financial aid for poor students of more than 7 percent. The College Board also determined that the average Pell Grant award for low-income students was $2,354, down from $2,474 in the previous year.

While federal financial aid for low-income students under the Pell Grant program decreased, The College Board found that tuition costs rose by more than the rate of inflation. The average increase at community colleges in the 2005-06 academic year was 4.1 percent. At state-operated four-year colleges and universities, the average price hike was 6.3 percent. At private colleges and universities, comprehensive fees rose an average of 5.9 percent.