Today, U.S Senators Patty Murray (D-WA) and Al Franken (D-MN) announced that they will introduce an amendment to the Bipartisan Student Loan Certainty Act that will redirect the Congressional Budget Office (CBO) estimated $715 million in government profit generated by that bill to college affordability in the form of support for the federal Pell Grant Program. The Pell Grant Program, which provides need-based grants to low-income students, faces a $793 million shortfall in fiscal year 2015, also according to CBO.
"Every dollar generated from this deal should be a dollar reinvested in making college more affordable," said Senator Murray, the Senate Budget Chairman and a senior member of the Senate HELP Committee. "Senator Franken and I have identified a clear funding need in the federal Pell Grant Program that can be filled with the projected profits from this deal. We should all be able to agree that ensuring that we are not balancing the budget on the backs of students and protecting aid for needy students are worthy goals in this bipartisan deal. "
"Students in Minnesota often struggle to cobble together the funds necessary to pay for their education, and many still graduate with enormous amounts of debt," said Sen. Franken. "Our amendment will make sure that the additional profits from this student loan deal go to making college more affordable by bolstering Pell grants. It's a basic American value that our students should get the best education possible and this will help them do just that."
Pell grants cover about 1/3 of tuition and fees and help lessen the need for student loan debt for low-income students. However, given current economic conditions, there is considerable demand for Pell grants and in recent years Congress has reduced student aid eligibility to pay for Pell shortfalls. Given current CBO estimates, Pell grants will face a $793 million shortfall in fiscal year 2015.
The Murray-Franken amendment would allocate the surplus savings from the student loan deal, projected to be $715 million, to protect Pell grants. This would help plug the Pell shortfall, would allow the maximum grant to increase to an estimated $5,845, help prevent eligibility cuts, and expand access to financial aid for students seeking secondary degrees at vocational and trade schools.
Supporters of the Murray-Franken Amendment include the American Association of Community Colleges, the American Council on Education, the American Federation of State, County and Municipal Employees, CAP Action Fund, the Committee for Education Funding, CLASP, Education Trust, Generation Progress, Jobs for the Future, the Learning Disabilities Association, the National Association of Workforce Boards, the National Association for Student Financial Aid Administrators, The Institue for College Access and Success (TICAS), and the Young Invincibles.