Crucial College Grants Survive Obama’s Budget Knife, Barely

The White House's 2012 budget draws a line around education spending.

By Julianne Hing Feb 15, 2011

President Obama’s big budget reveal came and went yesterday, and depending on where you look, Pell grants–which have proven a decisive factor in graduation rates for black and Latino colleges students–are either being slashed or salvaged. This being the gnarly world of federal budgets, both are actually true. 

Overall, the administration’s budget has been panned by both deficit hawks on the right and those on the left who say it abandons poor people. Regardless, the president and his advisors have identified education as a place where they plan to "win the future," and they’re highlighting their fiscal year 2012 spending plan as proof. 

The administration is asking for $77.4 billion altogether in education funding, which amounts to a 4 percent increase from the 2010 budget (the fiscal year 2011 budget has still not passed Congress). A number of initiatives got tiny boosts from Obama. He put Title I grants for schools serving low-income populations down for $14.8 billion, a $300 million boost from the 2010 fiscal year. Special education spending got $11.7 billion, $200 million more than 2010. 

The administration has asked for money for some of its special initiatives too, like $900 million for a third round of Race to the Top, the competitive grants program for states that adopt the administration’s reform agenda. The administration wants $600 million–$54 million more than 2010’s fiscal year–for its School Turnaround Grants, which are the new name for its School Improvement Grants program.

President Obama headed over to Parkville Middle School and Center of Technology in Baltimore County on Monday to tell the assembled students that amidst the need to tighten up federal spending, "we can’t sacrifice our future in the process," the New York Times reported.

"That’s especially true when it comes to education," Obama said, adding that "education is an investment that we need to win the future."

Pell grants are an investment that students of color need particularly badly. Just paying for school is a significant barrier to higher education for communities of color. While black students make up just 11 percent of those who receive Pell grants, according to a 2009 report from the National Center for Education Statistics, 46 percent of African-American undergrads receive Pell grants, according to the Journal of Blacks in Higher Education. The JBHE called Pell grants the "cornerstone of African-American higher education."

Pell grants are federal aid for low-income students to attend college. In recent years, because of both expanded eligibility requirements and the recession, the numbers of students who qualify for aid has shot up. In the 2008 fiscal year, Pell’s program costs amounted to $15 billion, Bloomberg reported. Today, the need-based program’s costs have increased to $35 billion, and the program is facing a $20 billion budget shortfall for 2012 as a result. More than nine million students receive Pell grants every year.

Under Obama’s proposed budget, students from low-income families would be able to get as much as $5,550 per school year for tuition and other school costs. Preserving that recently raised grant cap was a priority that student advocacy groups like the United States Student Association fought to retain. Whether they’ll be able to hold onto it is yet to be seen. The Republicans’ proposed budget seeks to slash the Pell grant cap by $845 per school year.

Obama has already shaved a few important provisions from Pell though. Obama proposed cutting a newly added year-round Pell grant benefit that encouraged students to graduate from college sooner by 2012. Reuters reported that the administration said for-profit school students would be hardest hit by this elimination. The administration has also proposed dropping an interest subsidy for graduate students.

Pell’s impact on graduation rates for communities of color is striking. Latino and black students are especially debt averse, it seems. Eighty-six percent of Latinos say getting a college degree is a high priority for them, but 49 percent of Latino students put off school because of high tuition costs and expensive student loans. Sixty-nine percent of black students who don’t graduate college say they left school because of crushing student loan debt, compared with 43 percent of white students. Pell grants help college completion rates.

The success of students of color is integral to Obama’s stated goal for the U.S. to regain its spot as the global leader in college graduates. The country is currently in twelfth place. Secretary of Education Arne Duncan has called this goal the "North Star" of his department’s education efforts.

It’s something the Obama administration is no doubt keeping in mind as they nip and tuck the education budget.