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Pell Grant program faces shortfall

/ Source: The Associated Press

The Pell Grant program for needy college students is facing a massive shortfall as the country's bleak job market drives people back to school.

An administration official told The Associated Press the program will cost $18 billion more than Congress and the White House had anticipated over the next three years. The official, who was not authorized to speak publicly about the budget, spoke on condition of anonymity.

"The administration is working with Congress to fill the gap, and we are committed to making sure the U.S. has an educated work force able to fill the jobs of the 21st century," said the official, who is not authorized to speak publicly about the budget.

Shortfalls and surpluses are common in the Pell Grant program, which forms the foundation for federal college aid. Anyone who is eligible gets a grant, making it difficult for the government to anticipate how many people will apply. Pell Grants typically go to families earning less than $40,000.

Yet the looming shortfall is the largest in the 36-year history of the program, whose entire budget was about $18 billion last year.

Lawmakers had approved a 13 percent increase in the maximum grant as part of President Barack Obama's economic stimulus law. That boosted this year's Pell Grant by $500 to $5,350. It was a huge increase; the maximum grant has grown on average by less than 6 percent a year.

Good news in 'difficult economy'
The chairman of the House Education and Labor Committee, California Democratic Rep. George Miller, said lawmakers will work together to make sure the program is funded, "as we do every year."

Miller sees a silver lining in the shortfall.

"In this difficult economy, it is good news that more people are going back to school to get the skills they need for in-demand jobs," he said. "We want to make sure we are doing everything we can to help them in this effort."

White House Budget Director Peter Orszag and Education Secretary Arne Duncan had a meeting with Miller and other committee chairmen about the shortfall last week.

The Pell Grant program faced a smaller shortfall, about $6 billion, last year.