Peeling Back the Layers of President Obama’s Proposed Budget for 2017 – Part Two

admin Federal Student Aid Programs, Financial Aid Industry News

March 9th, 2016

In Part One of a three-part blog series, we analyzed President Obama’s community college initiatives in full detail which included information on his grand idea of tuition free, public education through the America’s College Promise Act of 2015.  Now we turn our focus on federal grant initiatives.

Pell Grant Overhaul

Pell grants were a hot topic in the budget proposal including the return of summer funding for “year round students”, permanently extending inflationary increases in the maximum award along with a potential bonus in overall Pell grant limits for students that take at least 15 credits per semester, with an anticipated annual increase of $300 a student at the maximum award level.  The year round Pell program has had bi-partisan support in the past even though it was ultimately scrapped after it initially rolled out in 2009 in a President Bush budget and then rescinded to help rein in costs by President Obama in 2011.

The ultimate goal is for students to graduate quicker and enter the workforce at a faster rate.  The Pell proposals can also have an impact on college graduation rates, as part-time students tend to graduate at a much lower rate than those that are full-time so it incentivizes the students to take more classes.  The Department of Education estimates the proposal will help nearly 700,000 students make progress toward graduating on time by providing them with an additional $1,915 on average to help pay for college and complete their degrees in less time.  It is estimated the budget would need an additional $2 billion in funding for these items to be enacted.

Finally, there is a push for The Second Chance Pell proposal that would restore Pell eligibility for incarcerated individuals.  The program would extend Pell money to some federal and state prisoners taking college courses while still behind bars. Mostly, prisoners who are eligible for release in the next five years would be allowed to apply.

Read Part One, “America’s College Promise”

Read Part Three, Student loan proposals