The Pell Grant Amendment to the fiscal year 2005 budget resolution (S.Con.Res. 95) would have created a reserve fund to finance an increase in the maximum Pell Grant from $4,050 to $5,100 to attempt to keep pace with the rate of increase in public college tuition. In addition to a higher maximum, the amount of the average Pell Grant would rise by $600. The amendment also would extend Pell Grants to 500,000 new recipients. The reserve fund would be funded by rescinding part of the Bush tax cuts on investment income.
The Middle-Class Position:
The Middle Class Supports. A college education is an integral part of the American Dream. On average, college graduates earn 73 percent more over the course of their working lives than those with only a high school diploma. These benefits go far beyond the individual: the median college graduate contributes 44% more in annual tax revenues than the median high school graduate.
Pell Grants are the most widely-used federal college assistance program, serving 4.8 million Americans. Historically, Pell Grants provided an opportunity for students from low-income families to join the middle class, with the nation as a whole reaping the benefits of the higher tax payments, lower reliance on the publicly-funded safety net, lower incarceration rates, and increased civic participation of college graduates. Yet the maximum Pell Grant was last increased three years ago, and then it only went up by $50. In 2004, the average tuition and fees at a public four-year college was $5,132—an increase of 10.5 percent over the previous year. To pay for these increased costs, college students and their parents too often resort to taking on unsustainable amounts of debt.
From the Experts:
"Pell Grants are the most effective of the student aid programs in ensuring that low- and middle-income students have access to a college education." – Rod Paige, U.S. Secretary of Education, 2001-2005 (February 1, 2003)
“More attention should be paid to educating the U.S. workforce. America is on the cutting edge of the information and technology economy. But others are catching up. India and China award more natural science and engineering degrees than we do. The only way the U.S. will keep one rung ahead of the rest of the world is to ensure that we have a broadly educated workforce that keeps learning.” –Kathleen Madigan, Business Outlook Editor, Business Week (August 25, 2003)
"A college degree has become what the high school diploma was 30 years ago -- the surest pathway to the middle class. Two years of post-secondary education is now considered the minimum level of education necessary for success in this economy."-Demos, Millions to the Middle (August 30, 2003)
Beyond this Bill:
President Bush has proposed a fiscal year budget that would increase the maximum Pell Grant by $500 over five years, a modest step given the rate of tuition increases, but still a worthy proposal. At the same time, the U.S. Education Department changed the formula it uses to assess a student's need for financial aid. It is estimated that this change will disqualify 80,000 to 90,000 students, primarily those from middle-income families, and cut the grants for 1.3 million others. Members of Congress should fight to restore eligibility, while bringing student aid into line with the real cost of higher education.
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Injustice Index Facts
Proportion of American college students who receive Pell Grants: 3 in 10
Percentage of public four-year college costs covered by the maximum Pell Grant in 1976: 84
Percentage of public four-year college costs covered by the maximum Pell Grant today: 39
Amount by which the Pell grant was last increased three years ago: $50
Number of Americans who are worried about the cost of college: 3 out of 4
Percentage of Americans who would be willing to pay higher taxes to increase financial support for college students: 66
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