Understanding the Federal Budget Cuts

With all of the turmoil occurring around the world recently, there have been many important issues overlooked, specifically the state and federal budget cuts. Already passed through Congress, these budget cuts have been overshadowed by the protests they have caused in the United States, as well as several political uprisings in Africa. What's all the fuss about? Funding will be cut from programs across the board affecting not only local businesses, but students and faculty as well.The cuts that have garnered the most nation-wide attention are those that will affect programs involved with controversial agencies such as Planned Parenthood and Drug Treatment Facilities. Not only will these programs likely lose all state and federal funding, but programs that help impoverished families as well. With the loss in funding, comes a loss in the ability to provide certain services, leaving those who use the programs in the dark. Protests have begun, videos have gone viral and some centers have even started collection donations in response to the cuts, hoping for any extra help they can get to be able to provide for the people in need.

Another blow to low-income families is the drastic reduction in the monetary amount given to students who are eligible to receive the Pell Grant. According to Justin Hamilton, Press Secretary at the United States Department of Education, "We are making tough choices to protect the Pell Grant," despite President Obama's plans to cut funding for higher education by 89 billion dollars in the next ten years.

These federal cuts in spending, when combined with the drastic cuts in the state of Illinois, could lead to sharply reduced enrollment for higher education. As financial backing for college has steadily declining in the state of Illinois, fiscal year 2011 budgets shows that college funding has actually been cut by $100 million overall.

Also in fiscal year 2011, "higher education officials approved eliminating the monetary award program for need based financial applicants," according to the National Conference of State Legislatures. This policy was only approved for the state of Illinois and could cause many students to decide that an out-of-state education is actually less expensive. However, this idea has only been approved, not yet enacted, and probably will not be, according to the spokespeople for the legislature. Regardless, the reduction in the amount of the Pell Grant has been made into law and now more than ever, it's important to take a look at how this change could affect Parkland College.

Most people are aware of the basic stipulations that affect how much one receives in their Pell Grant. Having a lower EFC (estimated family contribution) and a greater number of credit hours are both ways to raise the amount granted. Typically, it has been easy to plan ahead, estimating the amount that will be received and preparing for the impending expenses. But recently several budget cuts have been proposed, and if these cuts are approved, some students will see up to a 15% reduction in their Pell Grants in years to come.

With over 9.4 million students relying on the Pell Grant, there is no doubt that many will be negatively impacted when the maximum award decreases by a proposed $845. This proposal, the largest proposed budget cut in the history of the Pell Grant program, was made late February by Republican leadership in the US House of Representatives.

Mark Kanztowitz, a financial aid expert who has been called to testify to Congress regarding student aid on multiple occasions, warns that up to 1.7 million students will lose their ability to qualify for the Pell Grant when the proposal passes.

The government website for student financial aid, www.studentaid.ed.gov, claims that the maximum Pell Grant from 2010-11 school year to 2011-12 will remain at a steady $5,550. However, the most recent update on this website was on February 4, 2011, seven days before the budget cut on the Pell Grant was proposed.

Since its creation in 1972 the Pell Grant, formerly referred to as the Basic Education Opportunity Grant, has undergone exponential decreases in funding. In the school year 1980-81, the maximum award decreased by $50, then again the following year by an additional $80. There was an increase in funding for several years, but the maximum award was slashed again, this time in 1993-94 by $100 and again in 2008-09 by $69. Now, in 2011-12 the reduction will be whopping $845.

An amendment passed in 2010 that will also affect students' Pell Grants in the near future. SAFRA, Student Aid and Fiscal Responsibility Act, guarantees that funding to the Pell Grant will increase annually to compensate for inflation, beginning in the 2013-14 school year. The maximum EFC will also rise annually, increasing the annual number of students receiving the grant.

Many factors influence the final award amount of everyone's Pell Grant. Even if a person's income level and number of credit hours is unchanged, their award amount could decrease by hundreds of dollars. As these changes begin to take place, have a backup plan and be prepared to rely less on the Pell Grant and more on alternative forms of funding. As for programs such as Planned Parenthood and Drug Treatment Facilities, only time will tell as they begin preparing for the worst.