Pell Increase May Cut Other Aid

Politicians and higher education experts welcomed the proposal to increase federal Pell Grant funding by the largest amount in three decades last week. But some experts have suggested that the increase may instead disadvantage the lowest-income students entering universities, though Harvard students will likely not be affected.

The Pell Grant—a form of federal financial aid that allows more than five million low-income students to receive help—would come at the expense of reducing or eliminating 44 other financial aid iniatives, according to a congressional budget proposal.

That cut would include eliminating the Supplemental Educational Opportunities Grant, which supplements the neediest of Pell Grant recipients.

According to Vice President for Finance and Chief Financial Officer Elizabeth Mora, the proposed budget will likely not affect Harvard undergraduates.

“Much of the strategic endowment payout from last year will be used to supplement financial aid so the impact may not be too great, but we’ll need to see the final numbers,” Mora said.

Currently 700 undergraduates receive Pell Grants at Harvard, and parents who earn incomes less than $60,000 are not expected to pay their children’s Harvard tuition.

Even though the proposal’s $7.3 billion increase affects aid programs other than Pell Grants, experts and financial aid providers said they were still concerned that the nation’s rising tuition will compound the effects of cutting financial aid programs.

“We are strongly supportive of the Pell Grant increase, but we have real concerns about paying for it by reducing other financial aid,” said Barry Toiv, who is the director of communications for the Association of American Universities.

“In general, I don’t think it’s a good idea to pay for this initiative by cutting the benefits of others, or in some cases the same students,” he added.

In addition, universities would have to “pick up more of a burden,” especially for low-income students whose grants may be reduced due to the redistribution of financial aid funds and programs, Toiv said.

Martha E.H. Holler, the managing director of corporate communications at the student-loan provider company Sallie Mae, said “it is not the time to cut financial aid programs.”

“We’re not addressing the problem by moving multiple programs to another,” she said.

Under President Bush’s budget, the maximum Pell Grant would increase by about 14 percent over five years, according to the U.S. Department of Education.

The maximum Pell Grant is now $4,050 but would reach $4,600 in 2008.

–Staff writer Marie C. Kodama can be reached at mckodama@fas.harvard.edu.