Obama’s budget proposal redirects funds to students

College students who qualify for Pell Grant federal aid will now receive even more money under President Barack Obama’s budget proposal.
The United States Public Interest Research Group Student Chapters released a report yesterday, “Obama’s Budget: Supporting Students, not Banks,” calculating the plan’s state-by-state increases in the maximum amount of Pell Grant aid and the number of students receiving aid.
“Right now, the maximum is supposed to be $5,350 next year, and President Obama’s budget proposal would bump that up an additional $200 for the year after that,” said USPIRG Higher Education Program Director Chris Lindstrom.
The increase would be funded by redirecting money from bankers to students, Lindstrom said.
“To pay for that increase, the budget actually cut subsidies banks and lenders receive from within the student loan programs and redirects that money away from banks and lenders back towards the Pell Grant,” she said.
School of Arts and Sciences junior Carly Sikorski said a plan that helps low-income people and not banks is a good idea.
“I’m for anything that takes money away from banks because after this whole thing, I’m really just pissed off at them,” she said.
Students under this program receive an average of $3,236 per year, but under the new plan, Pell Grant recipients nationwide would see an average increase of $121 to a total of $3,357, Lindstrom said.
She said only students who demonstrate the most need from the lowest economic brackets would be entitled to the new maximum amount of $5,550.
Lindstrom said 260,000 additional students would be able to receive this aid nationwide.
University Director of Financial Aid Jean McDonald-Rash said one important point in Obama’s program is the grants are mandated to increase with changes in inflationary rates, as they are currently determined by statute with no guarantee to match the rising costs of education.
“It will more reflect the cost of education, and as the cost increased, so will Pell Grants be increased,” McDonald-Rash said.
Christa Hannon, grassroots coordinator of the University’s chapter of NJPIRG, said between 2000 and 2008, the cost of tuition for New Jersey public higher education institutions has risen close to 30 percent, but on average, federal grant aid has remained unchanged.
“Any increase in financial aid is a good thing because tuition costs are continuing to rise, and if these costs don’t rise then the gap is going to get bigger,” she said.
Hannon said while the program is gaining money, the federal government would actually save around $47 billion in five years.
“They’re changing the channels through which loans are being lended,” she said, as the plans call for a shift to a direct lending program.
School of Arts and Sciences sophomore Kaitlin Fischer approves of Obama’s plan.
“The cost of tuition is definitely rising more than it should be, and I think students obviously could use some more money. I think the money’s probably going to go to the kids who probably need it the most,” she said.
McDonald-Rash said University students who qualify for the aid will benefit from the changes.
“Generally from year to year there are about 8,500 [University] students receiving Pell Grants,” she said. They receive $3,600 on average through the program.
In New Jersey, 5,104 additional students can qualify for aid under the new plan, for a total of 106,263 students, according to the report.
On average, New Jersey Pell Grant recipients receive $3,457. According to the report, this number would jump to an average of $3,472 per student — an increase of $125.
“I mean overall, I guess that probably is a lot more money going towards the program, since there’s so many students who are going to be getting the money, but for each individual student, that’s probably not a very big difference,” Fischer said.
The full report is available at www.uspirg.org.