Digital News Report- According to a report released by the Campaign for America’s Future (CAF), an additional 27,547 students in California can receive Pell Grants for college if lender subsidies are cut. The Pell Grant program is a federal grant given based on financial need and calculated through the Free Application for Federal Student Aid. The college affordability proposals in the president’s budget will increase and expand Pell Grants and Perkins Loans, broaden the U.S. Department of Education Direct Loan program, phase out bank loan subsidies and create state and federal partnerships to help students complete their college education.
“Family incomes and college grants haven’t kept pace with soaring tuition costs,” said CAF co-director Robert Borosage. “No student should be priced out of the college they need to succeed in the modern economy. With more and more high school graduates putting off higher education because they can’t afford it, the president’s budget would help provide the change students and families need.”
Between 2000 and 2007, the cost of tuition at a public college in California has increased by 37% with 9% of that happening within the last year. Pell Grants were originally designed to cover 80% of the tuition cost, but due to the dramatic increase it usually only covers 1/3. The maximum award for the 2009-2010 school year is currently $4,860, but will be increased to $5,550 for the 2010-2011 school year under Obama’s new budget proposal. The average Pell Grant of about $3,531 will be available to more than 500,000 students across the state of California.
Obama’s budget proposal will also make the American Opportunity Tax Credit permanent. The American Recovery and Reinvestment Act created a new partially refundable $2,500 tax credit to provide tax breaks to millions of families, including low-income families who don’t pay taxes.