Despite the Obama administration's overt and covert attempts at protecting education and research from the government's drastic measures towards reining in spending and reducing the budget deficit, the overall federal Pell Grants program may witness cuts up to $100 billion, according to Jacob Lew, director of the Office of Management and Budget.
In an interview with CNN's Candy Crowley on Sunday, Mr. Lew said that in order to ensure that the maximum amount of Pell Grant available to an eligible student remains at its current level of $5,550 for school-year 2012, the new budget would discontinue the policy of allowing students to qualify for two grants in one year - one for the regular academic year and another one for summer school. According to administration sources quoted by CNN, this would lead to savings worth $8 billion dollars in the next year, and $60 billion dollars over 10 years.
A second area within the program that would be affected is the subsidy on student loans in graduate and professional school. The Government would no longer pay the interest on loans for a certain section of students in graduate/professional school for as long as they are studying, as it does now. Instead, the interest would accumulate even during their years in school, though students would start repayment only after they graduate. This again would lead to savings of $2 billion next year and $29 billion dollars over 10 years.
Meanwhile Justin Hamilton, press secretary for Education Secretary Arne Duncan has been quoted by Inside Higher Education as saying, We're cutting where we can so that we can invest where we must. In the absence of the present measures, the maximum Pell Grant could decline by $2,500, he said adding that That is financially unworkable and morally unacceptable.