Higher Ed Bill Would End Subsidies to Private Student Loans Lenders and Raise Pell Grant Ceiling

The Student Aid and Fiscal Responsibility Act of 2009, passed by the House of Representatives last week, will initiate several of the Obama administration’s promised changes in higher education accessibility.

The bill will end subsidies to private lenders for student loans and will raise the Pell Grant limit—a federal need-based grant—from $4,731 to $6,900 by 2020.

While the bill, if passed by the Senate, would have little effect on the financial aid packages students receive from Harvard, it could prove to be a helpful supplement to the admissions office’s ever-growing financial aid output.

Due to the Harvard Financial Aid Initiative and additional admissions recruiting, the number of Pell Grant recipients at Harvard increased by 75 percent over the past 15 years, according to Senior Associate Director of Financial Aid Janet L. Irons. This number dwarfs the national average increase of 38 percent.

Still, Harvard has been able to meet the full need of financial aid recipients even in the absence of the grants.

This year, just $3 million of the $145 million the admissions office will award in financial aid will come from Pell Grant subsidies. But According to Irons this percentage could change if the Student Aid and Fiscal Responsibility Act is passed.

“A 25 percent increase in the level of Pell Grant funding would certainly help us in this challenging economy,” Irons said. “But the reality is that we have made a fundamental commitment to our financial aid program, and have a long tradition of meeting the full need of our students regardless of the funding fluctuations of federal financial aid programs.”