April6th

WASHINGTON, DC (April 5, 2011)—The Fiscal Year (FY) 2012 budget proposal released by the House Budget Committee today takes aim at the more than 9 million students who rely on Pell Grants to go to college. Regardless of whether the proposal to slash funding to its 2008 level targets the maximum grant or funding for the entire program, the result would be a devastating blow to financially challenged students and families.

There is no question that the recent economic downturn has put unsustainable pressure on federal student aid programs, and there is no question that reducing the deficit is part of ensuring a healthy economic recovery. But proposals to reduce the cost of the Pell Grant Program should be driven by economic need and rational analysis rather than ideology. The magnitude of the Pell Grant cuts contained in the House budget proposal simply fails that test.

More low-income students and unemployed workers are seeking postsecondary education, and America’s long-term economic health is increasingly dependent on a highly educated work force. Slashing Pell Grants will hurt millions of students who are going to college to improve their lives and train for 21st century jobs. Because of the economic downturn, more students and families need federal student aid.

We take strong exception to the argument made in the House budget proposal that Pell Grants make higher education less affordable and less accessible.

Numerous studies have found no link between financial aid and tuition. Specifically, two federal studies*, conducted during the George W. Bush and Clinton administrations, found no evidence federal financial aid leads to tuition increases. Instead, long-term declines in state support for higher education are primarily responsible for the growth in tuition rates at public institutions. In 35 states, covering nearly two-thirds of public institutions, the authority to control tuition and fees resides outside the institution, often in the hands of state legislators or governors. Reductions in state support make federal financial aid even more critical in enabling students to attend.

In addition, recent campus actions suggest increases in federal student aid over the past two years have helped temper tuition growth at private nonprofit colleges and universities. On average, private nonprofit institutions raised published tuition in 2009-10 by the lowest rate since 1972 (4.3 percent) and raised tuition in 2010-11 by the second lowest rate since 1972 (4.5 percent). In those two years, private colleges increased institutional student aid by 9 percent and 6.8 percent respectively. Adjusted for inflation, net tuition at private nonprofit colleges and universities actually declined 11.2 percent from 2005-06 to 2010-11.

These measures were possible only because increased funding for Pell Grants and other federal student aid programs helped to take some of the pressure off strained campus budgets. The federal deficit should not be balanced on the backs of low-income students. Congress must act now to stop the raid on student aid.

* Study of College Costs and Prices, 1988-89 to 1997-98, Vol.1, National Center for Education Statistics, December 2001; Straight Talk about College Costs & Prices, National Commission on the Cost of Higher Education, February 1998

The Student Aid Alliance is a coalition of 62 higher education organizations committed to protecting the federal student aid programs.

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CONTACTS:

Erin Hennessy
American Council on Education
(202) 939-9367
erin_hennessy@ace.nche.edu

Tony Pals
National Association of Independent Colleges and Universities
(202) 739-0474
tony@naicu.edu

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