FOR IMMEDIATE RELEASE: CONTACT: Chris Lindstrom
Thursday March 26, 2009 617-308-1063 (o)
10:00 a.m. 617-747-4330 (c)
OBAMA EDUCATION PLAN WOULD PUT COLLEGE WITHIN REACH FOR MORE New Jersey STUDENTS
USPIRG report details state-by-state impact of transferring Pell Grant subsidies from banks to students
WASHINGTON – Today, NJPIRG released a new report, “Obama’s Budget: Supporting Students not Banks.” President Obama’s budget proposal makes a significant reinvestment in the Pell Grant program by cutting excessive lender subsidies from the student loan programs and redirecting that money to student aid.
“Getting a college degree is practically a necessity. But states are cutting public college budgets and grant aid has been stagnant for too long. As a result, students face skyrocketing loan debt upon graduation,” Christine Lindstrom, Director of the US PIRG HIgher Education Project, noted. “The president’s plan changes the priorities within the student aid programs, putting struggling students and families first.”
The key piece of President Obama’s higher education plan includes increasing the Pell grant maximum from $5,350 to $5,550. It also makes the Pell grant more reliable, by ensuring that the maximum would increase each year to keep pace with inflation. Finally, more students would become eligible to receive Pell grant aid under the plan.
To pay for these changes, the president’s proposal cuts excessive bank and lender subsidies from within the student loan programs. The non-partisan Congressional Budget Office estimates that this cut will result in a savings of $47 billion dollars over 5 years, with $5 billion being redirected toward students in the first year alone.
The report calculates the benefit if the full $5 billion went to students in each state. The average Pell Grant award in New Jersey would rise by approximately $125 next year. Approximately 5,100 additional new students in New Jersey would receive their first Pell Grant and be able to attend college.
University Director of Financial Aid Jean McDonald-Rash said one important point in Obama’s program is the grants are mandated to increase with changes in inflationary rates, as they are currently determined by statute with no guarantee to match the rising costs of education. “It will more reflect the cost of education, and as the cost increased, so will Pell Grants be increased,” McDonald-Rash said.
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**“Obama’s Budget: Supporting Students not Banks” is available at: www.njpirg.org**
